What camcorders work with Elements 7?

I bought the Panasonic SDR-H40 camcorder and, if I use Premiere Elements 7 to bring up and edit the video, the quality is very poor. Panasonic even warned in the user guide that there would be poor quality unless you used their editing software (which is aweful). How do I find a camcorder that will let me upload and edit the videos in Premiere Elements 7, and not lose any video quality? I think I would like a camcorder that uses a flash drive and SD cards (I was told the batteries last longer as there are no moving parts like those that record to a hard drive). Preferably under $400.
P.S. I am running Windows Vista.
Thank you for any suggestions.

Yes, a hard drive or DVD camcorder is probably not the best choice for use with Premiere Elements or other video editing software.
Tape-based camcorders interface best with the program and provide the best results, for a variety of reasons. They also happen to be the most affordable!
For under $400, a miniDV is pretty easy to come by. At that price range, the best bets are Sonys, with Panasonic miniDVs running a close second, IMHO. (Canon makes great higher end camcorders -- but I've been disappointed with their lower end cams.)

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