HD film vs standard for documentary film making?

I need to buy a camera for making documentaries but am so confused as to what I should go for. First of all I have an extremely low budget (250 GBP) which I can use to upgrade my DSLR to a Canon 550D or Nikon d5000 or to buy a Sony VX2000 second hand camera from my uni. The latter is standard definition and takes DVtapes. If I want to enter my work into festivals I'm not sure if HD is a requirement. Also I think that it's not practical to continuously have to upload footage from an SD card, any advice?

Hands down, the sony will deliver better video.

The so called HD in the DSLRs is highly compressed H.264 and fails miserably in editing.

The standard def video captured by the Sony can actually be up-converted in editing and still be less compressed than HD by nearly a factor of 10!

Funny you mentioned upload. Because of the huge amount of data, DV tape is captured in real time. One hour of footage will take one hour to up-load. This is the sole area that the HD card-cameras have the performance advantage.

I could go on, and often do. Look at the data. The GB/hour tells the story. 13gb/hr for MiniDv, at the best the others will get 11 gigs/hour (And remember, the frame size is 6X bigger!)

Don't let the term "Standard" throw you, it is the superior format by a long shot.