Is a 4.0 Digital Camera better at taking pics than snapshot featureon Hi8 camcorders?
Yes, most Hi8 Camcorder come with low megapixel digital picture features. So in comparision to a 4 Megapixel camera the picture won't be as good. But a 4 Megapixel camera can't capture video (at least not a long video). So if you can afford it buy both and use each as they are intended. If you can live with a 2 Megapixel picture then a Camcorder is all you need.
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