For $500 you are talking "entry-level" DVC.
I bought a Panasonic PV-DV51 for $400 after $50 MIR at CC last November . . . I believe Dell has the same deal now. I am totally satisfied with it (as it blows away all the analog camcorders) regarding ease of use, quality, etc. 18x optical zoom is fine. Going up the Panasonic model line only gets more "features" (additional software, ease of transferring still photos - not picture "quality") until you spend about double.
The only thing I miss is the ability to add an extension mic (although the built in dual-microphone is OK). This unit is perfect for "home" use, travel, etc. I have a few tapes from my 3 month Hawaiian vacation I am editing now.