I had posted a similar question a couple days ago and was looking at going with a hard drive too. With some further research, I am now leaning in a different direction that I'll share with you since we seem to be in the same boat with the same thoughts. As a side note, Sony's site shows the SR-200 priced at $799 (over your stated $600).
I'm now leaning toward the Sony DCR-DVD810 which records on DVD's, has 8gig of flash memory built in (115mins of high quality video, 170mins in sp, 325mins in lp) and a memory slot to add more. Although the specs on this one aren't quite as high as the SR-200, it is seemingly better than the hard drive recorders in the under $600 range. If you're really trying to stay under $600, you could go this route and have room for expansion. I like the thought of flash because it's less likely to get damaged if dropped or fail for some other reason. I think right now an 8gig memory stick is $150 which will eventually come down. I know there is a 16gig on the way.
The SR-200 definately looks to me to be the better choice of the two, but it's also a lot more $$$. 40gig sounds exciting, but I also wonder if I would ever really fill that up (9 hours @ HQ). Perhaps you would.
I'm not really very knowledgable on all this, but I am a father-to-be on a budget, trying to do my research and not wanting to shell out a lot for junk. Hopefully this is helpful to you.
I have a dell inspiron 1720 with Vista Home edition. Like many of the threads I have read- we have a new baby and I am looking for a camcorder priced under about $600. I am most interested in a HDD. I called Dell and asked what camera works with Vista and they recommended the Sony DCR-SR200 Digital Handycam 40GB HDD Camcorder. What are your thoughts on this camera? I am a totally rookie and not sure if we have a firewire, but we do have a USB port. Are there any other HDD camcorders that you would recommend? Also, where is a good place to purchase? I am always looking for a good deal, but it seems like there are quite a few web site scams in the camcorder market. Thanks for your help!!!