In fact, physics is my profession. If anything, this discussion lies in the realm of mathematics (i.e. mathematical transforms... after all, that is the basis of compression algorithms). I think you will want to be clear on that first before proceeding with this discussion.
Assuming that all other factors are equal, you are correct that the DV format preserves more of the original video signal from the image sensor than the MPEG-2 format. However, everything else about your posts suggests that you do not have a good understanding of compression, and that you are not reading carefully before replying.
Let's address some of those misconceptions.
Both DV and MPEG-2 are lossy compressions. This means that some information is lost when the data is compressed to each of these formats. Also, MPEG-2 is more lossy than DV. So far, I believe we are in agreement.
"For 7.5 hours of video, a mini-DV will capture and store about 98 gigabytes. It will, of course, need more than one tape to do this. The JVC drive will store 30 gigabytes. That means that the mpeg-2 compression is throwing away more than two thirds of the data that the camera is supplying."
This is where you go wrong. Compression is not merely about throwing data away! That is a gross and erroneous simplification. Compression is about expressing data in a more succinct form. This can be done without discarding any information (lossless compression), but will not result in as small a file as a lossy compression.
The ultimate goal of lossy compression is to succinctly express the data AND discard extraneous information. A compromise is typically struck between how much information is discarded and how small the file needs to be. Thus, an MPEG-2 file being more than three times smaller than a DV file DOES NOT mean it contains three times less information. If at this point you still believe that to be true, then you are truly misunderstanding the principles behind compression algorithms.
A good example of the concepts involved with compression exists in the world of mp3s. Compare a CD track to an mp3 track. An mp3 is merely a compressed representation of the digital data stored on the CD. The data on a CD has a bitrate of 1378 Kbit/s or 1411 Kbit/s. For the sake of simplicity, let's say 1400 Kbit/s. A high quality MP3 can be achieved at 320 Kbit/s. Does this mean that the MP3 has lost more than four times of the data contained in the original CD track? NO. The MP3 represents the data by transforming it from the time domain to the frequency domain, and dropping frequencies that have little or no impact on the human listening experience. The lower the bitrate you encode an MP3 at, the more significant the frequencies that are dropped. I suggest reading up on how mp3 compression and Fourier Transform algorithms work.
"If you want to edit any video you shoot during the life of the camera, you will be working with a severe handicap because you've only got one third of the original information that came from the camera."
I think I've already established that the above comment is WRONG (specifically the part about "one third of the original information"). It is actually very easy to extract clips from DVDs (there are numerous applications that are capable of it), and decoding to DV from MPEG-2is not nearly as processor intensive as encoding to MPEG-2 from DV. You suffer some minor quality loss because of the encode to DV (since it too is a lossy format), but I have found that there are some excellent algorithms for this that do not noticeably impact the image quality.
"You will also have no backup of that fragile DVD, unless you make a second copy.... The tapes are a far more reliable form of backup than a DVD. DVDs can be destroyed almost instantly, and their shelf life is much more uncertain."
You must be employed by a tape manufacturing company. I'm not sure what DVDs you use, but mine aren't that fragile at all. In fact, I've never had a DVD player eat a DVD. But I've definitely had a camcorder eat a tape on numerous occasions. If you are careless, then obviously either one can be destroyed relatively easily. I would like to criticize the makers of tapes and DVDs alike for designing a product that melts in fire!
"The tapes are also much cheaper than any other form of backup."
Where do you buy your DVDs? A quick glance at prices on the internet tells me that miniDV tapes go for ~ $5 a piece. I can get blank DVDs for $0.30 a piece. How do you figure that tapes are much cheaper than any other form of backup?? BTW, I can also write to DVD faster than you can write to tape.
"You can pop in a new mini-DV anytime you need to and move on, while the hard drive of the JVC unit will need to be tethered to a computer. I, for one, don't need that kind of hassle when I'm trying to focus on getting good video footage. If that hard drive does fill up, you are SOL. It is also likely that the power needed to run that drive will drain your battery more quickly."
Yes, I like the fact that I can go 7.5 hours without having to switch tapes. That is fantastic. And I have a laptop, so I'm not tethered to my computer, it's tethered to me. What happens if you forget to bring enough tapes? Then you're SOL and I've still got my 7.5 hours of recording time. I've got a two hour battery and a one hour battery, and they last as long as they are rated.
"Finally, a hard drive in a portable device is far more prone to a crash which causes the loss of all data on the drive than is a tape drive."
That's why the drives have a G-force sensor in them, so they shut off if the camera is dropped. Don't forget, tapes can be eaten (especially if you don't clean your camera heads regularly - something you don't have to do with hard drive based players), so they aren't without risk of "crashes".
"Hard drives can be a good idea. However, they should be an addition to a tape based camera, not the sole form of storage. They should also store the full set of DV data coming from the sensor, not a compressed form. Cameras like the Canon XL2 support the approach to hard drives that I just described."
OK, be realistic here. We're talking about consumer level camcorders, not prosumer or professional! Canon XL2 ~$5000 vs JVC Everio GZ-MC50 ~$1000. A bit of a price/class discrepancy, don't you think?