mjh
man i would love to have a budget like that, but trying to do prints from a camcorder chip isnt the best way to do it as, because the chips used for still and video cams are totally different in the way they process a image(its real complicated to explain the differences without going to technical, maybe someone else can explain it in easier way.
now to do a ideal 8x10 inch print you need a camera with a 2400x3000(7.2 mp cam) pixel sensor so that no interpolation is needed (reason you need 300 dpi is that this is the same DPI that pro photo printers(like fuji frontiers, etc), but you can get a good 8x10 from a camera with a 4mp sensor but a 5 will have more detail in the image.
Yes i know you can interpolate from a smaller sensor but i prefer to do as little interpolation as possible because the software is guessing at the detail of the image and the algerythems unless in high end software(Genuine Fractals) isnt the best as most of the time its just taking the one pixel and mulitplying it(IE taking a 4x6 andblowing it up to a 8x12 would take one individual and mulitply it by 4 to get that big of a print).
now if your set on doing stills from a vid cam there is one cam that i have seen its prints from that looked excellent and that is the Sony TRV950 3ccd camera, but that and the housing for it will take out your budget.
sorry for the short post im having to leave for a awards dinner, and will expand on my post after i get back or in the morning
FWIW
Tooth
as for
your best bet would be to do a set up of each