Upgrade from Sony MVC300

I have the Sony MVC300. For the most part, I'm pretty happy with it. Although I have 2 issues:

1: I've ran into an issue where I use Nero CD Buring Rom for another software program and the camera requires me using Direct CD. These two software programs are not compatible and I an unable to have them both installed at the same time - even though I am using them for different purposes.

2: One of the most annoying features of using the disc is that you are at the mercy of the camera to find the right place to start recording. We lose many a perfect shot because of this and other lag times...

What I am looking for?? At this point I could care less - I bought the MVC-300 becuase at the time the media was less expensive - all the other formats have come down so much in price it's no longer an issue. I swear that I've used the same CD-RW for over 10,000 pictures and it's still going strong!! I want something that is 5-8 megapixels that offers a decent mpeg or other video format. I started looking at videocams, but realized that in the end it's only a few minutes of video that's worth looking at anyway...

I really liked the manual & auto capabilities. Plus the more zoom the better...

There are SO many cameras out there!! Can anyone help me narrow them down?? I don't think I want to spend more than $1200 US.

Thanks!
Carie