Just when you thought you had a handle on the whole high-definition war for world domination, Sony and Panasonic have announced a new format dubbed AVCHD which will provide for high-definition recording onto existing 8cm DVD discs. The format employs the MPEG-4/H.264 codec for video compression and Dolby Digital (AC-3) or Linear PCM for audio. But don't panic because...

AVCHD is aimed exclusively at the high-definition video camera market. Sony and Panasonic claim the format will allow manufacturers to develop compact video cameras with HD capability and they intend promoting it strongly to the industry via licensing deals. In theory, AVCHD-capable video cameras will be able to record 1080i at either 50 or 60 frames per second and 1080p at 24 frames per second. Lower resolutions are also supported and audio can be recorded in modes up to 7.1 channels.

As usual, there will be initial compatibility issues as consumer DVD players and PC drives will need special software to be able to play AVCHD discs. In the longer term, however, as the H.264 codec is at the heart of the both Blu-ray and HD-DVD video formats, AVCHD playback should be easy enough to implement in these players as they hit the shelves.
One other obvious limitation is that recording time will drop to 20 minutes at the "average" quality setting as compared to 30 minutes on a standard definition camera. On the upside, you do get the RAM-like capabilities of an optical disc format as opposed to the tape-only HD formats currently available for video cameras.
Sony already has an AVCHD camera in development and when asked why the company didn't just go the whole hog and dump a Blu-ray drive in a camera, a spokesman said that proposition still had to jump the hurdles of price, drive size and energy consumption.