If you are planning to shoot video to upload to youtube or myspace or any other similar site, the uploaded video will be downsampled. No matter what, the quality will - um - suffer.
If you are planning to shoot video to upload to a site and provide .AVI or .MOV or some other file format, the compression decesion is up to you - and what you select will dictate how much compression - hence loss and potential image quality degradation - get applied.
Your tradeoff will be (simplistically):
LARGE file size = high image quality
Small file size = compressed and lessor image quality...
varying sizes and image quality in between.
In my opinion, both cameras will provide fine quality for what you are intending to do - but more important will be your camera skills (and audio and editing and lighting, etc...
Honestly, someone who knows how to use their gear can use a $200 camcorder and post awesome content... and someone who does not know what they are doing can spend $50,000 on a camera and post garbage.
I would like to shoot and edit videos for the web. I bought a Panasonic GS500. I am deciding if I should keep it or upgrade.
I saw a good deal on a refurb. Canon GL2 (still double the price though).
Will the GS500 give me professional looking video for the web or do I need to upgrade? What do you think? If neither of these cameras are ideal, can you recommend one?