The media does not matter. The amount of compression applied to the video file matters. There are other components that impact "video quality", too including large lens diameter and large imaging chip array.
Low compression = less discarded video data = better video quality
High compression = more discarded video data = reduced video quality
High compression, consumer grade, camcorders under about $1,000 record AVCHD-compressed MTS or MOD files to flash memory (or had disc drive).
In the prosumer area, low compression camcorders are limited, but mini-DV tape based camcorders can record to external memory storage devices (Sony and Firestore make them) that are flash memory. The low compression DV/HDV recorded to the external memory device over firewire is the same high quality, low compression digital video recorded to miniDV tape.
In the pro area, other low compression formats include HDCAM/XDCAM (Sony), DVCPro/DVCPro HD (Panasonic) and XF (Canon). There are several others. The Sony cams usually use CompactFlash, Panasonic cams use P2 cards and Canon uses SDHC.
The Sanyo Xacti is flash memory and inexpensive. Climb the ladder to get larger lenses and imaging chips... add a mic jack - then manual audio control and other manual controls... all the way up through $50,000 pro camcorders... Expense depends on your budget and your quality - control - requirements.
Are Flash Media camcorders any good ? What can we expect price wise?