I just bought a hdr-sr1 today. I also have a baby on the way (2nd child), and it was time to upgrade my video camera. I couldn't afford to wait on the release of the HV20 due to the timing of my child's arrival, and a vacation that we have coming up very soon. So for me it was between the HV10, HDR-SR1, HDR-HC3, HDR-HC5, HDR-HC7 and HDC-SD1 (panasonic avchd that writes to sd cards). I was able to download some video samples from the HV10, HC3, HC7 and SR1 (couldn't find any for the HC7 and SD1). I was then able to burn them to DVD and play them back on my PS3. The conclusion that I came to based off of the limited sample availability was that they all have outstanding pictures. I was viewing these on my mitsubishi hd1000 720p DLP projector on a 108" screen so I can definately see all of the finer picture details.
I did not notice the tearing or smearing that some have reported with the avchd camcorders (SR1). The SR1 videos had motion, but it was someone walking through the frame at the pace of a brisk walk. My wife even commented that the videos looked like Discovery HD documentary footage (impressive). I am sure that if these videos were shot from a speeding car the results may have been different, but this did not play into my decision because every video I have taken to this point has been slow pan landscape videos or baby/child videos with similarly paced motion. In low light, the quality of all of these cameras dropped off; however, it still far exceeded the low light capability of my current Canon SD miniDV camera. I did order a video light so that I can try and maximize my indoor picture quality.
I went back and forth for a month trying to decide which camera to buy. I discarded the HV10 from consideration due to the form factor and feature set. I also discarded the SD1 from consideration due to its lack of manual features and some information that I had read about the final picture resolution (it uses 3 non-HD CCDs and combines them to form one picture, which to me seems more like an upconverted to HD video and not the 1440x1080 that the Sony and Canon cameras offer). I was then left with the Sony cameras. I finally settled on the HDD solution for the following reasons: little to no perceived PQ difference from my samples, 4 full hours of HD storage, no tapes to worry about, flash for still pics (not on HC5, not sure about HC3), fast USB file transfer, instant gratification of being able to watch the videos without having to worry about the tape position (this actually leads to my wife using the camera more), surround sound without the worry of tape motor noise, manual focus ring, mic input (not on HC5 or HC3), 3.5" LCD (big improvement), less mechanical parts to break, and ease of burning to DVD for playback in HD on my PS3.
I had no worries about avchd software support and here is why. My first child is four years old and before she was born I had edited and authored about 5 DVDs, and since she was born I have only edited 1. The reason for this is two fold: 1) you don't want to edit your child's life because every second is precious, and 2) you don't have any time to edit because that is time that you can't spend with your child. I figure it will take me some time to accumulate enough footage to worry about editing it, and it will be some time before I have the free time to do so. The avchd software will come, and when it does I probably still won't be ready. In the meantime, I will just burn the footage to DVD for playback on my blu-ray player (I should also point out that you can do the same on HD DVD players) and buy several big USB external HDD for archival and off-site backup (I will leave one at home and bring the other to my office for storage and update them on a regular basis).