I'm looking to buy a camcorder (HD preferable but not essential) that has good still picture quality.

Basically, I'd like to be able to replace my existing mini DV camcorder and 4Mp camera into one device.

I've been looking at the Sony HDR-TG3, but I don't really want to pay that much (and the Sony Memory Sticks are extortionate).

Does anyone have any suggestions?

What's your budget? The best consumer camcorder on the market is the Canon HV20 (or latest model HV30, there's little difference).

It shoots high definition video, has a 3MP stills funtion and includes a slot to insert a MiniSD card. Slightly lower quality than your current one but it's a great allround camera, believe me.

Edit: checking the camera you mention that's out of your price range, then this is too unfortunately. Sorry!