I'm also looking for the right camera, everything I've read suggests getting the HV20, and as suggested above do the variable rate in post.
You can pick up an hv20 for ridiculous prices right now (750$+/-75$ from numerous legit places).
Or you can go with the rental of more expensive equipment, but personally my plan at this time is
1) HV20 - 700$
2) Assorted camera accessories (spare battery, filters, DIY adaptor for using standard camera lenses) - 300$ (possibly quite a bit larger)
3) Camera movement accessories - DIY (dolly, crane, looking for decent smooth tripod ideas still...) 200-400$
4) Sound 150$ - 300$ (low end quality shotgun mike, plus cheapo lav set)
5) Sound accessories - DIY boom, composite poll, vibration mounts - 200$
6) DIY lightkit 300$
7) Computer - already have - might get a second monitor - definitely a spare hard drive (250 GB for internal, plus probably the same for backups - although entirely likely I'll need more storage down the line), already got 4 GB of ram (100$) - an additional 400$.
8) software - contemplating going completely open source - Video - Cinelerra and/or Blender for NLE, Blender for Compositing, Titling, and Effects. Audio - Ardour, Rosegarden, plus assorted (I just switched to Ubuntu (Linux) for my primary OS after severe Vista stability issues so unless I switch back to Vista or purchase a copy of XP - I'll need to stick with open source solutions anyway...)
All told I figure I can get away with about 2,500-3,000$ worth of gear (excluding the computer itself which I already have) and software.
Tom M.
LetterRip