You sound like I was when I was trying to decide on a camcorder or a camera. In the end I went for a camera that had the options I really wanted (10x optical zoom and with a 1 mb card I can get up to an hour of video). Mine is a Canon Powershot S1 Is. Of course this is last years model but I got it on sale for around $350 not including the 1mb card.

I hope you can find something with the features you want in your price range!
I'll be looking forward to seeing more of those cutie pies!