Hi - I went through this about a year ago and ended up with a Sony TRV-27 - a little over your price range, but here is what I learned:
Various features like effects, mpegs and picture taking are really unimportant. For effects, you are much better off doing all of this on the computer and in editing. What is really important is manual controls - can you set the exposure, focus, white and black balance? Also, how does it feel - can you zoom smoothly or not? How about the filter mounting ring - is it a standard size or some odd ball size (like my Sony!). All of this is far more important that resolution (you won't see much a of a differnece on a normal TV anyway), or extra gadgets. What you need is something you can shoot with and get on tape what you want to get on tape. Another thing is these things really don't do well with low lighting. Higher lux ratings may or may not be accurate, but indoors, you need light. I use all kinds of cheap lamps and different colored bulbs from HomeDepot. Pro lighting costs a fortune, but no sub $1000 camcorder will really handle low lighting - they just add gain and that often looks grainy.
Also, PLEASE BE CAREFUL BUYING A CAMCORDER ONLINE. You WILL find lower prices, but these people are scum of the earth - most in NYC! There are endless horror stories about unbelievable price deals on camcorders online. Common tricks are shipping used merchandise, non-US and therefore no warranty cameras, cameras without lenses, batteries or anything and then unanswered calls, no returns, no credits on credit cards... it is awful!
Also, these companies are on to this and create new and multiple web sites all the time - to sort of wipe the slate clean. Go with a reputable store. Online the only one I would trust is Crutchfield - they are legit. I cannot stress this enough - DO NOT BUY A CAMERA ONLINE FOR THE LOWEST PRICE - YOU ***WILL*** ABSOLUTELY GET BURNED!!!!!!! - IF IT IS TOO GOOD TO BE TRUE, IT IS A SCAM.
Please respond to this post and tell me you won't buy your camcorder online for some insanely cheap price! I'm worried about you!