Currently I've been thinking of trying to record family events then hopefully music videos in the future. My focus lately was to get a camcorder until I saw a photographer filming with a regular digital camera. Will this shoot high quality videos like a camcorder and what's a good brand to start out with, not to expensive?
If you use a 7D/5DMKii/iii, it would very well be better than a normal camcorder. It will take some getting used to and some practice to use it well. The cameras i mentioned are the more pricey models that do great videos (especially the 5Ds) but their current lower end models also take good videos. Both canon and nikon have cameras like that.
The Panasonic Lumix GH2/GH3 are probably the best cameras in your budget. much better offerings that entry level cameras from nikon or canon. If you want to choose from nikon/canon, I suggest canon because of magic latern custom firmware you can install on it and get better features out of it. GH2/GH3 has the same ability, but there isn't anything available for nikon or sony.