Camcoder has da kind of sensor suited for videos. Its low on resolution nd low on still image quality nd the features offered for still may be too low. Even a 5MP avg quality cud outperform a high end camcoder in case of still images.
But camcoders are superb in case of videos. The video procesing of da sensor is much faster nd focusing is much better. But a digicam can't have such quality for videos.
If u want a camcoder, get a Sony HD Camcoder. Itll cost u a min of 40k
If u want a digicam, then get Canon A 710IS.
Its a 7.1MP cam with 6x optical zoom. It has got optical image stabllization nd superb picture quality. Do a search nd read da reviews of it to find its true potential.