Thanks Russell. I don't think with that many pixels being downsampled to VGA should be a problem. (If anything it should show less quantisation noise...) I can appreciate how downsampling something like 1024x768 or even full HD to 640x480 is going to cause artefacts, but when it's around 100 pixels on the CCD for every pixel on the image, that's gotta be pretty damn good. Or maybe I'm missing something and don't fully understand how these cameras work in video mode.
Anyway, I've decided to go with the Nikon D3300 that Luka recommended. I haven't heard back from the 550D seller, and really for the same money a brand spanking new probably slightly better performing camera vs a 5-6 year old unit is rather appealing. I've read enough reviews on the D3300 to be convinced it's an excellent deal at the current discount price. It's ridiculous. I paid more for an old second hand film SLR 20 years ago and double that for a compact digital 10 years ago (and that's in those days' dollars).
I did the sign up to the HN spam in exchange for the $25 voucher and I was at the checkout ready to buy, but Harvey Norman's final "Proceed to Paypal" button does not work. It's a link to the same page that you're already on.
I sent them a query about it.
The HN special ends at the end of this month and the $50 cashback from Nikon at the end of March. Thanks again Luka for the tip. I should pay you a finder's fee really.