Recently got a Panasonic SD90 for £240. It was a special edition for the London Olympics, and so the price is lower than the normal ones, but the same camera. Excellent little camcorder, the only downside of which is the lack of ring-manual focus like on DSLRs.
It does 1080/50p in .mp4 files and everything else in AVCHD, and does 5mp stills too. 21x optical zoom, 40x izoom. In my opinion, the best you can get for the price. Not sure how much exactly they go for in USD, but I'm confident they'll be somewhat under $500, so perfect for your budget.
Hope that helps