HDV hasn't come down into the $1,000 range yet. The only HD cam that is is the Sanyo VPC-HD1, a MPEG-4 based cam that can shoot 720p, which has a retail price of $800. (Note that if you found a HDR-HC1 advertised as "new" for $1K, you would want to make sure your BS detector is properly calibrated, because mine would be going off right about now.)
As to whether it's a good choice: well, for a lot of users, the HC1 is all they'd ever need. Most serious videographers would find some shortcomings with the HC1, though.
Since HDV is MPEG-2 based, it is more difficult for computers to edit. Unless you have the latest fire-breathing system (or a reasonably modern machine with terabytes of hard drive space available for intermediate files), you're probably not going to have a very good time editing HDV. The output from any HDV setup is indisputably gorgeous, though.