A Flip will do fine - pretty much any camcorder will "work". If the video does not go directly into iMovie, it is easy enough to transcode the video with a tool like MPEG Streamclip
http://www.apple.com/downloads/macosx/video/mpegstreamclip.html
to a format iMovie can deal with.

Apple has an incomplete list...
http://support.apple.com/kb/HT3290

Start with defining "low cost". Since a camcorder can range from $50 to $50,000 some would consider $800 "low cost". Keep in mind that the amount you spend will have an impact on video quality, but someone who uses the equipment within its published specifications and does not expect more than the camcorder was designed to do will provide great video - but if someone with no skill and too-high expectation uses the camcorder outside its design parameters, poor quality video will captured.

Most camcorders will not list that they are computer-specific-compatible. That generally refers only to the software on an optical disc included in the box with the camcorder. And that software is typically useless - even for the other operating systems.

(Note: Do not waste any time, money or effort on a DVD camcorder. The 8cm small DVDs will not work with the slot-loading DVD drive.)