This is a long one but hopefully it will help you make a decision.
I bought this particular model for a number of reasons, the first being a loyalty to Sony because so many other of my electrical goods are Sony ones (my old stereo, dvd players, my sat nav, my HD TV and my previous handycam) and also because it's a good price for a very good product (I don't work for Sony by the way, I just think they are very reliable).
A second reason is that my old camcorder is a Sony (using mini DV tapes) and I never had any problems with it (including survivng an accidental fall from a table) so I was quite happy to buy a new Sony.
The final reason was that this is costs the same or less than the older SR5 model but has many more features - so that kind of sealed it!
It was a bit intimidating at first, looking at this thing out of it's box and wondering how easy (or not) it would be to use but rest assured, Sony's legendary ease-of-use is definitely in place here. Also, it feels good! What I mean by that is you can feel quality in your hands, and this has it! I would recommend reading not only the printed 'quick start' guide that comes with the product but also print off the Acrobat pdf full guide that is on one of the DVD's. This will give you much more info on the features of the camera.
It comes with a 'docking station' for charging but this is not necessary as you can charge the handycam without it. The docking station seems difficult to fit but is an advantage in securing the camera and not allowing it to fall over (good when you have kids running around).
I had never used a video camera with a hard drive before but this thing is a 'hybrid', i.e. it uses 2 recording formats, the hard drive and a memory stick (not included). This may sound a bit of a gimick but I have found it very useful already. You can decide what recordings go to what format and also easily transfer data from one to the other. This is handy when downloading to the computer - dub the data from hard drive to memory stick and then plug the stick straight into the relative computer port. Easy!
Finding what you want to view, transfer of delete from the hard drive is very easy using a thumbnail menu. I liked this easy of access a lot. It saves having to fast forward or rewind as you would with mini DV tapes.
There is no lens cap - so for me, this meant goodbye to forgetting to take it off, put it back on or have it dangling in a shot.
What about the most important thing - the image quaily? Well, having being used to the images from a standard definition camera for that last 5 years, I was very impressed with the quality of the high definition images from this camera. First of all, unless you have a blu-ray dvd burner on your computer, you won't be able to view these images on a dvd player, so for the time being, you'll have to connect it up directly to your HD TV using an HDMI cable. It's a bit of a pain but well worth it. You can see great detail in for example the blades of grass on a sunny day and the colours are excellent. Even close up on only a 720p TV (i.e. not full HD), it still looks great.
Using the PMB (motion picture browser) software provided, you can also take great still images direct from the video - and they are of good quality too! You can step through the video frame by frame to select the best still iamge. These are in jpeg format and thus easily viewed using any picture editing software.
You can also switch between HD footage and standard definition footage. This is handy of you still want to edit footage using video editing software but your computer struggles with handling HD footage (like mine). You can also record images in HD but then transfer them in standard definition as well as HD - so effectively you can save the footage twice - once in HD and once in SD. Best of both worlds there!
A few things to be aware of:
You need a mini-HDMI cable to view the images direct from an HD TV. This is not included in the box but it is not very clear at all from the literature that this is what you need. A mini-HDMI cable is not the same as a normal HDMI cable - one end of the cable has a mini-connection for the camera and the other standard size end is for the TV. You can get a decent one from HD Cables for about a tenner. Also be aware that, for some reason, it wouldn't work through my HDMI switcher, so I had to connect direct from the camera to the TV.
It is not clear at all from the guides exactly how to transfer your HD images to computer or how to view them. It briefly covers the subject but I found it a bit confusing. It refers to the files as AVCHD files but once you download them, they have a .mts OR a .m2ts file extention, depending on how you transfer them. Why the difference?? One file type can be viewed on the AVCHD player included in the software (m2ts), the other can't (mts). Again, why? Neither can be viewed very easily using any other media player. How, for example, can I transfer the files to an .avi format? I found the whole thing a bit confusing and unclear. Please Sony, give us more practical advice on this.
Viewing video using the software provided is okay but it doesn't handle camera movement very well. It is a bit sluggish - don't know if this is to do with the software of my computer. I was a bit disappointed with this and does not compare with viewing the footage on the TV. The lesson for me was that when filming, try and keep camera movement to a minimum and keep it smooth and controlled.
The lack of a viewfinder takes a bit of getting used to as I always liked using the one on my previous camera.
Image quaility drops in lower lighting conditions. Indoors in the evening for example is still good but not in the same league as footage outdoors on a well lit day - this is when the image quaility is at it's best.
Despite the niggles (especially over the format of the HD files), I would still very much recommend this handycam. Once you try HD, you'll never go back to the ordinary stuff!