I've started to take more digital video now, and I was appalled by the quality of audio I was getting on my camera. My video camera is a high-quality camera, but it suffered miserable audio quality. This quote from a shotgun microphone comparison about sums it up.
In case you haven't figured it out yet, the camcorder-mounted microphones that are standard issue on most DV camcorder's are really about as useful as a breadstick in gathering high quality audio.
The problems with the built-in mic were mainly quiet audio from the people in frame, and the my booming voice whenever I spoke.
I decided to upgrade to an external microphone and went with the Rode Electronics VideoMic. Panasonic theoretically makes a hot-shoe microphone for my camera, but I never found it in stock anywhere. The Rode VideoMic plugs into the external microphone and requires a 9v battery. One of the slightly annoying things is that you have to remember to turn it on or you get no audio, but I've only done this once so far.
And it is well worth it. The audio quality is excellent. The shotgun effect is very effective. If the person operating the camera speaks it sounds natural and not booming. The only downside is that background noise in the video frame will be much more noticeable. It's size may put many off, but there simply isn't a good solution to getting audio recorded in a really small package.