Most of the mid-range cams by Panny, Sony and Canon will do fine. The Canons may be worse in low light (normal indoor lighting). When shooting the kids low light performance is very important. You can't always add light when the baby is taking first steps, etc.
If he can afford it, 3 CCDs will give better color than 1CCD. And larger CCD size is better. Typical consumer cams now have 1/6" CCDs. The Panny GS500 has 3 CCDs, each 1/4.7". It should take same video as GS400, which is one of the best consumer cams ever.
Look for optical image stabilization over electronic or digital. Don't worry about digital zoom, it is a waste. Also try to ignore stats on still pics--a camcorder won't match a good 3MP digi cam. Look for good optics/lens--the big 3 above all have good optics.
If he wants to edit video on a Mac or PC make sure he gets a MiniDV camera. Do not get a DVD-based camcorder or MPEG4. MiniDV only.