One of the best new purchases at our school have been the new Vado HD cameras from Creative. We purchased 20 of them to use at our school and they are super easy to use yet take very high quality HD movies (and still photos). They are great investment and perfect for students to use.
We have been using them for several video projects that we have used with the Grade 5 students. The students were doing scenes from books they have read. It was perfect because the students could spread out in the common areas and hallways to do the filming. This cuts down on the amount of background noise (a constant problem with using desktop cameras). The only downside is the mics are not super good but definitely good enough for a quick class project. The other disadvantage is it can be quite shaky without a tripod. At $200 each, it is a decent investment for low budget video.