Panasonic makes two good quality 3-ccd camcorders that are quite inexpensive for the quality they offer... the PV-GS65, the PV-GS150, and the PV-GS250. They range in price from about $500-700. They aren't the same quality as a $3500 pro camcorder, but they are noticeably better than a $250 low-end DV camcorder.

If those are out of your budget, I'd say the low-end Canon ZR100 (usually $300 or so) is one of the better of the single-chip cameras, though none of the ones from major manufacturers are awful.

The one you linked to is a low end piece of shit. It's designed only for low-resolution web video (640x480, which isn't even full screen by today's standards) and probably records direct to flash media or something, which means it's compressing the crap out of the image before saving. I'd say stay away. If you *must* get something in that price range, buy a 3 or 4 year old Canon or Sony DV camcorder used off of Ebay. It will be light years better in quality.