file-based format recommended for cameras under $650

[codemaster]

A few years ago, there were cameras from Sony and Canon, on the market, that recorded straight to dvd format. Somebody bought a $500 dvd camcorder, a Canon DC100, and to me, these dvd camcorders seemed like a very bad idea after I needed to edit the clips in Premiere Pro, because:

- it compresses the audio to ac3 256kbps stereo; because of this, after editing, audio will inevitably pass through 2 generations;
- it fuses all individual clips, into a single dvd title, separated by chapters; this makes it hard to split individual clips;
- you have to use mini dvd rewritable discs, wich after some time, could fail and give crc errors, and the clip is lost forever; this happened several times, and it was an awful experience; these discs are increasingly becoming very hard to find today, if they can still be found at all;
- alot of intermediary steps needed before I can import the clips into Premiere Pro CS3, to edit them: splitting the clips with sony vegas 7, copying the mpeg2 stream and muxing it to mpeg container, and decoding the ac3 to pcm wav (wich results in a small audio delay, like around +/- 100ms).

So, now that there are only file based cameras on the market, with solid state memory, what file based format would you recommend, for cameras under $500, if I want to edit the clips in editors like Premiere Pro or Avid Media Composer , without having to go through intermediary steps in order to import the clips ?

And also, besides the format, what other important aspects do you recommend I look for ? Maybe the lens, the type of sensor, or battery type, or the type of settings and presets ? Is a $650 DSLR better than a $650 video camera ? The video quality from a FullHD $650 DSLR camera is the same as the video quality of a $650 FullHD video camera ?