You can honestly get a good digital camera for much less than $1000. The Sony DCR-HC32 is a nice on for $500 or less.
You want a cam with high optical zoom, the more CCD's the better, stabilazation, and a memory stick.
My camera is an old Sony DCR-TRV140 Digital8 that I paid less than $400 back four years ago. It shoots what I consider great video for home use.
If you have $2000 to spend, you can get a high-def camcorder. I'm going to wait another couple years for them to get to the $700 range and then upgrade my camera...
Of course, a lot depends on what you intend to film. Making short movies? Filming skate boarders? Rock bands? Just filming vacations and birthday parties and family stuff? Filming a new baby? (New babies generate a *lot* of camcorder sales...)
The low-cost panasonics are held in pretty high regard by people into making little films because the panasonics are pretty good at supporting manual controls, having microphone inputs, etc. The Sony's tend to be good for people that want everything automatic -- people that want simple point-and-shoot.
Most consumer camcorders these days end up being pretty disappointing in "low" light. And low light means just about anything indoors after dark (i.e. normal house lighting). The low light issue should be less of a problem for people into making short films, since they should be prepared to set up lights (even cheap, handyman "work lights") when necessary. Setting up a 300watt light to film your newborn asleep in her crib isn't an acceptable situation though, so a model with good low light performance would be important there.
You'll find a million models to choose from, and a million different opinions...