I guess you are probably in the US...so I wil base recommendations on that fact...
I will make this short and sweet ( I hope)..
Format..for under $400 you will probably have to choose between mini DV (4mm) tape or mini DVD format..in this price range and format selection Canon and Sony are the rulers. IMHO I would stay away from JVC or Panasonic ( for this price range only). Mini DV tape is the older of the formats and is a linear access format whereas Mini DVD is or at least has the potential of being random access format. In linear you start from one end and have to FF or RW to the point of access, in RA you just chapter skip. Mini DV tape is the more robust of the the two formats and in my experience less prone to failures..BUT you must dump down to your computer to edit or play back from the camcorder...mini DVD on the other can play back in most set top DVD players ( with limitations). You might ( as someone here did ) find a HDD camcorder for under $400 on sale, but in this price range with HDD you get what you pay for...I could go on for hours about the quality of HDD, but considering a GOOD quality Seagate 2.5" 60 - 80 G HDD are relatively expensive, that does not leave much left over for the rest of the machine.
High Gb memory - well this is all totally subjective depending on the compression...time for recording vrs compression is what you are looking at really...miniDV tape is 2 hours don't do anything else..miniDVD should only be recorded at the fastest speed at that will give you 30 min approx..never use SLP.
Features/camera...at this price point you can probably expect up to 6 megapixels - but remember this is probably interpolated - not real megapixels..short meaning interpolated means adding extra pixels where there aren't any..most camcorders don't mention this in their adds - you have to read the product specs..Sony is about the only one that shows it directly in the camera specs.
So what to buy...As I said Sony or Canon are my top choices. if you had a bit more to spend I would say Panasonic as well. Prices in this range fluctuate dramatically. A lot of folks recommend Ritz camera in the US, I can't say because I cannot order from them economically..but as a reference point they have a Canon zr900 with case and free tape for $249.00..they also have a sony DCR DVD610 for $349.00..now they also have a JVC GZ-MG130 30GB Hard Disk Drive Camcorder factory reconditioned for $316..I am not much on factory reconditioned units, but if you have to have a HDD, then JVC uses decent internal HDD. I understand from others that Ritz has a very good no questions asked return policy..again , not sure..
