as the original source... perhaps even less... with a new camcorder.

The AV-in on a camcorder is analog video. You did not tell us the model of the current camcorder.

The 1080i capability of a new camcorder only applies to the video being captured by the lens memory chips of the high definition camcorder. If the AV-in is coming through the analog (composite) yellow RCA adapter, it will not be in 1080i... it will be in standard definition, analog, video.

I looked around. The usual suspects: Canon HV20, HV30, Sony HDR-HC7 and HC9 - and their hard drive and flash memory counter parts - are indeed all AV-out only. The closest I can get is the Sony HDR-FX1. It is 1080i and has analog AV-in - but it is outside your stated budget.

Are you saying that you are converting the old VCR tapes to miniDV tape - by connecting the VCR video/audio out to the AV-in of the camcorder? Then what happens?