There are a number of camcorders now that take HD video in the HDV format. I recently got one (a Canon), and the HDV video plays back very well on the PhotoBridge. (I think BJ Johns had this working a while ago with a Sony HDV camcorder too.)
I transfer the video from the camcorder to a network drive using DVHSCap, a free utility that is part of the Firewire SDK for MacOS X.
Straight off the camera the file is an HD .ts file that plays perfectly on the PhotoBridge, including audio. It doesn't get much easier than that -- pull the video off the camera, then watch it right away. The picture quality is very good. Since the PB plays it back without any transcoding or other conversion, the picture is as good as when it was taken.
Converting the file to a DVD that can be shared with others is more challenging, I am trying out DVDStyler under Linux for this purpose.
If you are looking for a camera, avoid ones that use the AVC format. It doesn't use MPEG-2 so the PhotoBridge can't play back the files without conversion, which probably takes a long time with big HD video files.
If other people have used HD camcorders with the PhotoBridge, please post here about your experiences.