Franken-camera

Civilization is the limitless multiplication of unnecessary necessities.

It's a digital camera....it's a camcorder, no its both.  This has been the confusing state of digital image capture devices for the last couple of years.  Remember when digital camcorders starting to be able to record still images to a memory stick?  Trust me this did happen back almost 9 years ago and the image quality was what you'd expect from technology that was from almost a decade ago.  The reason was that still images were not the camcorder's thing, it was all about video. 
The Single Lens Reflex Camera, has been around for decades, stable, very high quality but it cost a lot for film and processing.  Next arrives the Digital Camera, exit film and processing, but lacking the quality of their stodgy old ancestors.  Then the light bulb goes off in the collective minds of both the camcorder and the camera manufacturers .  "We've got all this technology, high resolution sensors and oodles of snappy software, we can do everything!" and they did. 
In the last two years, Canon has produced a digital camera ( Demo Video ) that takes incredible quality HD movies and most of the major camcorder manufacturers finally accessed the true power of their progressive image sensors for razor sharp HD quality stills.  
Holy Crap, do I need a camcorder or a digital camera?  Yes. The truth is for most people either may work fine.  Digital still cameras offer most consumers the option of video as well as stills, although not much available recording time.  Most camcorders can record high quality still images and also offer the possibility to record your daughters dance recital.  If you're a professional the choices get harder.  There are media workflows to consider and where the finished footage will need to end up (on broadcast TV or in someones home DVD player).
The bottom line is that the consumer, the prosumer and the professional have never had more choices at a lower cost than today.  I have people ask me to suggest a camcorder occasionally.  That question merits questions in return.  Do they want to edit their videos?  Do they want to not bother?  Do the need long lenght record times?  There are different consumer camcorders and yes even digital still camera to fit almost every need and price range so whatever your need you're probably in luck.  As we always say in the video production field, "It ain't the gun, its the gunner".  Shoot away!