Great! There are a good amount of small camcorders that can get you started. The easiest way is too look at review sites and put in "below x" amount to give you an idea of what is available. I like the site trusted reviews (
http://www.trustedreviews.com/camcorders/).
What I find to be the most important thing when looking at camcorders is what the footage looks like. Start browsing Vimeo using camcorder names to locate videos and see what people have shot. Then you start to get a good idea of what the color of the camcorder is like (I like the look of the panasonic hmc 150 and samsung hmx r10 personally).
Another thing to keep an eye out for is how you want to use the camcorder. Will you want a microphone port? Is digital image stabilization sufficient or do you need optical image stabilization? Another thing, how does the camcorder feel? Walking into a big (or little) box store and getting your hands on some camcorders can be helpful to see if you want a large or small body.
To save you a bit of time, you don't need to get an old camcorder just because it fits your price range (remember, look at the footage it produces). There are plenty of camcorders that have come out in the past year that fit the bill of being under $500 and of decent quality, here are some examples:
samsung hmx r10
I just found out about this camcorder this evening and it is pretty impressive for a small camcorder. The color is nice and has some fun modes (slo-mo and time lapse). Here are some links for research:
http://www.trustedreviews.com/camcorders/review/2010/05/17/Samsung-HMX-R10/p1
http://www.vimeo.com/12541199
http://www.vimeo.com/15599309
canon hf r10
Canon does quality work. They are one of the few companies that still put a microphone and headphone jack on their low end camcorders (I think the sony xr 150 has one...but that is not the point). There are some people who like the "color" that canon camcorders have. This is where it comes down to personal opinion, and what colors you like. As before, here are some links:
http://reviews.cnet.com/digital-camcorders/canon-vixia-hf-r10/4505-6500_7-33949022.html
http://www.digitalcamera-hq.com/camcorders/products/canon-vixia-hf-r10
http://www.vimeo.com/15113251
http://www.youtube.com/watch?v=6BYflVNUSWo