I had a similar dilema to you recently and opted for HDD because I wanted the simplicity of transfering video - my wife is not all that techy and I am lazy.
I bought the Sony SR90 which was £550 and is great, the only issue I have with it at the moment is that it struggles to maintain focus sometimes, but I figure thats not a factor of it being a HDD recorder so is probably irrelevant to you.
Let me know if you want some raw footage to have a look at, I'm sure the quality is not as good as you might get from other media types due to compression but Im more than happy with it, possibly in a few years time when I move to high def tv and want to upscale the dvds then I might notice the difference but for now I cant say I have any issues.
My advice would be to go and try out some of the Sony on JVC ones, I read about a few of the cheaper ones not being that great in terms of IQ (jaggies etc) but there is at least one new model out now since I bought mine and that should bring down the price of the SR90/100.
Stu