Overall, the M4xx series' video looks relatively sharp--and looks even better played directly on a TV, like most of its competitors. There is some aliasing on edges, generally a result of the interlaced video format. (frame grab)
I don't normally shoot a distortion shot for camcorders, though I'll probably start now; given how narrow the lens at its shortest focal length (43mm), I was surprised by the amount of barrel distortion there is. (frame grab)
Though the M4xx series uses the same sensor as the more expensive HF G10, the lenses are very different, and it shows in a variety of ways. In this case, the more pentagonal aperture renders less pleasing out-of-focus highlights.
Because the camcorder was stopped down to its smallest aperture it emphasizes the effect. (Frame grab)