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I love this camera; takes great video and pictures. You can zoom while taking 720p video without any noising coming from the zoom motor. Plus there is no limitation to how long the movies can be as long as there is enough memory. On normal HD quality, I can take 4 hours of video on a 16GB card.
The FZ35 is a great camera for all-around use. Yes, the HD video is excellent and it focuses quite fast. Pretty decent zoom range.
I prefer the Fuji S200exr for photos (sweet, non-motorized manual zoom) and larger image sensor better for higher-ISO shooting. The fuji video absolutely sucks, and I'm being nice about that.