We have a nine month old baby at home, so just before she was born we bought a JVC Everio camcorder:

http://www.jvc.ca/en/consumer/presen...8/stylish.html

It's got a hard disk inside, not flash, but it's still easy to operate, small and does a great job.

That being said, we really don't use it that much. Our youtube and flickr site is full of 30 - 60 second video clips of the baby, and almost all of them were shot on our digital camera, not our camcorder. Most people don't want to watch more than 60 seconds of video at a time anyway, so the camera is ideal. We also take it with us almost everywhere we go, so we're always shooting video with it.

So I'd shoot some sample video with their digital camera and see if they're happy with it. (Note that digital SLRs aren't as good with this.)

Also, a quick note about HD video. High-Def is all the rage right now and if they're shopping for a camcorder a salesguy might talk them into it, but it's important to remember you need a lot of disk space to store high definition movies, and a good processor and a lot of RAM to edit them.

Finally, if they're going to be shooting baby pictures and videos I'd STRONGLY recommend looking at an online backup services like this:

http://www.carbonite.com/

I know it's $50 per year, but 10 years ago they'd've likely spent 10X that each year in film, processing and blank videotapes.