What if Santa brought you $20k for video for your paper's web team?
$20k sounds like a lot but that's really only enough for one decent video kit. To put it in perspective, just the lens for a TV camera costs that much.
Here's how I'd prioritize: Audio first. Unless your current audio recorders are top end, get good recorders like the Marantz (which will hold up in pool use) -- $500 to $600 each with flash cards and mics. One for everyone on Santa's list. You can do amazing things with still pictures and crummy video if the sound is good.
And get good microphones for however many video kits you end up with -- spend at least $500 each on good shotguns, and another $600 each on wireless mics -- and don't forget to budget for the cables, mounts and windscreens -- they add up fast. Every cent you spend on audio is worth it.
Ok, that takes care of the most important stuff. Now for the edit stations. Yes, edit stations, plural. Seriously. We have people literally standing in line for our edit bays. One person doing one story is going to tie up an edit station all day. You'll need more than one. You don't really need super duper high end computers, but you do need a lot of storage -- at least a terabyte of external firewire or SATA drive space (NOT usb) in addition to what's in the computer. Dual 20" monitors are better than one 24" and is about the same price (unless you're on a PC and need to buy a video card, too.) Very important: you really, really want good studio monitor speakers and an enclosed room for your edit bay. (Your co-workers will kill you after you've played the same sound bite 20 times, trying to get the right cut point.) Headphones suck, but they're necessary (because they won't give you your own room, even though you really really need it) and you need a bunch of Sony MDR7506 'phones at $100 each... one for each recorder, camera, and edit bay. You'll also need a video playback deck -- which is over $2k by itself -- and a separate TV monitor and speakers for the deck. Don't forget software -- in addition to editing software, you'll need compression software plus a bunch of plug-ins -- those add up, too. You'll also need a digital-analog converter so you can capture footage from somebody's vhs tape of an alligator eating the neighborhood cats.
Ok, you're out of money and you haven't got any video cameras.... well, there's always next year.
You need cameras that have both external microphone inputs - with volume control - and headphone jacks so you can listen as you record. I can't emphasize enough how important the audio is. There aren't many camcorders out there anymore in the budget category that do this. A couple of our people are trying to get by with Panasonic GS300's (I think) that don't have headphone monitoring. It's killing them. The good cheap cameras, like the Canon Optura 50 and the Panasonic GS400, have been discontinued.
Most any camera that has good audio features is over $2k. The cheapest HD, the Canon XHA1, is $3700 for body alone, then add $150-each batteries, case, rain cover, etc, plus the mics. Those little digital cameras you mentioned have plenty of resolution for the web, but they don't have audio controls. Did I mention how important good audio is? Plus they shake so much your viewers will get motion sick watching. Maybe the Panasonic DVC7? They're around $1k but I've never used one. And you'll need a decent tripod -- at least $400.
Beware of the hard drive-based cameras and the digital cameras -- most record in proprietary formats that you can't edit easily. Check the specs carefully to make sure the files from your cameras can be edited directly in your edit program of choice. You'll die a thousand deaths while spending hours trying to convert .xyz video from some digital camera that was SUPPOSED to save you time, but won't. Tape rules. It's its own built-in archive.
A light is a great thing for interviews and one Lowel Pro Light - with a dimmer - can make a world of difference to your end product.
B&H Photo Video has a huge catalog and decent prices and a shopping cart that stays up for a while, so you can do lots of virtual shopping.