Need advice about new camcorder or digital camera

[frannn]

DH's birthday is next month, and then comes Xmas. I have been wracking my brains to come up with great gift(s) for both ocassions (last two gifts were huge hits-an mp3 player and a modest sound system for the tv, etc). We have a camcorder (about 4.5 years old, 8mm, average size), and a digital camera (1.3 megapixels, I think). I was thinking of getting a new camera or camcorder, or a camcorder that also takes digital pictures. I can't spend a ton, but if I do spend more than I should, it'll be the "big" gift for both B'day and Xmas. Anyway, the drawbacks with our current camcorder are- a bit larger than the newer ones, no good light, no separate LCD screen. Other than that it works great! Same with the digital camera. Will I be wasting my $ getting something new, when ours works fine? Any other ideas? If I do go this route, about how much will I be spending, what features should I be looking for, what should I run away from? What about the refurbished route?
Thanks!