Ian posted this in a comment, but I wanted to share it with everyone:
Hey everyone. Let me tell you my experience. I recently purchased a Canon 7D DSLR to use for both still images and video for business and personal use. I've only had it in my hands for about a month now, so I'm still learning it's ins and outs. So far, here are the pros and cons in my opinion.
Pros: The video quality is fantastic. It shoots in full 1080p, in both 30 and 24 fps. You can also shoot in 60p in 720p mode which allows for some great smooth slow motion action. Like I said the quality of the video is really top notch. What makes it even better is the ability to use different lenses. With this option you can achieve a greater range of look and depth that you really can't get with the standard video camera. I've shot some video with a 50mm lens at 1.4 f/stop opening in low light that just blows me away every time. It also has a bigger frame size than any other video camera out there (besides the Red) which allows for amazing detail and depth. Also, transferring from camera to computer is quite simple since there is no tape involved.
Cons: Shooting without a tripod or Steadicam is too difficult. I love the bulkiness of a big video camera. The DSLR is just too small to hand hold shoot all the time. When you are the least bit shaky, it really shows up, and when you are shooting for long increments you just can't hold it still for more than a couple of minutes. I can't, anyway.
The LCD screen is stuck on the back of the DLSR and it can't move. Therefore, you are limited in your range of movement, because you are limited in what you can see yourself doing, unlike many video cameras that have a pop out and moveable LCD screen, not to mention and a handle on the top of the camera itself.
Last I would say is the audio. You may as well record audio separately if you are doing any sort of professional work. But hey. That's what a lot of people do anyway.
Overall, I think a good DSLR with video can be well worth your money. It can be a powerful tool in the hands of the right person.
So basically I'm confirming everything Derek said. Amen brother.