I do not use "special HD miniDV tape". I use Sony Premium miniDV tape. I was on a shoot yesterday with 2 Canon XL2 cameras and 2 rather high-end Panasonic cameras (one being an AG-HVX200). Everybody used the same kind of tape.
Regarding your second question: Yes. Using the analog (composite) cable that comes with the camera, you can connect the yellow-video/red-right audio/white-left audio and playback on a standard definition TV. To playback high-definition, the HC7 has an HDMI port. It also has a composite cable for video (you need to use the red-right audio/white-left audio on the composite cable for audio if you use this method).
I have been shooting with my HDR-HC1 for over a year. Import the video to my computer, edit, burn DVD. The resulting DVD is Standard Definition... REALLY REALLY clear Standard Def, but only Standard def. I got a high-def Panasonic plasma about two weeks ago. The DVDs still look great (playing through a 4 year old progressive scan Sony DVD player using component rather than s-video) on the new TV. I can also output from my computer back to the camcorder and playing that back via the component cables is quite impressive. The HD read/write optical drives are still too expensive for me.
If you plan on doing any editing, be aware that when you transfer the hi-def video from the camcorder to the computer, the file on the computer will take up about 4x more room that a standard definition clip of the same length. 1 hour of high def is about 30 gig.
When was the last time you got a camcorder? If it was more than 5 years ago - and you are planning on using this HC7 for at least 3-4 or more years, I would suggest that you go with the HD option - and stay in miniDV tape based camcorders. If you don't have a HD TV, that's OK... I found the irony of having a HD camera but nothing to watch its HD video on quite amusing...
It is too bad the HC7 doesn't have a mic-in jack - though it can use Sony proprietary mics in its Sony proprietary "active accessory interface" - some would not consider this an external mic jack...
I am in the market for a new camcorder. I have been looking at some prosumer units. I am not sure if I should invest in a HD camera. The Sony HDR-HC7 camera will record in either the HD format or the SD format. According to the camera specs both formats will record on a mini dv cassette. I thought HD required a special cassette. I do have a question regarding HD recording. If the camera records in HD would it be possible to play that on a TV that is not HD? Is it worth buying a camcorder with an HD option?
Thanks for any tips you can offer.