Sanyo VPC C6 (or whatever the lastest model is VPC CG6 -- I think it does H.264!). SD memory cards (no tapes!), mpeg 4, compatible with iPhoto, fits in a pocket. 1gb = 42 mins.
The downside is video quality. It won't be as good as a larger camcorder. But since you have it with you more often, you actually use it. I know lots of people with video cameras that just sit in a closet or drawer. The video quality is still good enough for nice looking DVDs, if you go iMovie -> iDVD.