First thing, right off the bat - you're not going to get good low-light for that price. Even more expensive cameras mostly stink at low-light. However...
What you might consider is getting a Flip Video-style camera that allows for external mic input & storage expansion, so you can at least beef up the mic and add more room for recording as needed. Some of the newer handhelds advertise improved low-light performance as well, such as the Kodak Playtouch and Zoom Q3HD. I'd definitely check out the Zoom Q3HD, here's a sample video:
http://vimeo.com/15533387
The onboard mics are amazing and it does pretty dang good in dark conditions. It has some dark-condition options such as "Concert Lighting" which do a LOT better than the other handhelds I've seen. Here are some more sample videos:
http://soundmakesthemovie.com/artists
It's right up your price alley, too - $300 out the door. It also includes a Line Input jack to allow for external mics, so if you want to use something like a Rode VideoMic or a clip-on lav mic, you can do that too. You can put up to a 32GB SDHC card in the Q3HD, so you have plenty of room for expansion. The only downside I see is that it doesn't have image stabilization like some of the newer handhelds. My sister has a Kodak Zi6 and I have a Kodak Zx3; mine has image stabilization and hers doesn't, and there is a noticeable difference in shakiness. From the Zoom sample videos, it doesn't look too bad though. If you can use a tripod, you're all set. Also, no optical zoom (digital only).