I couldn’t be more excited about this news about an update coming for the Sanyo VPC-HD1, a.k.a. the Xacti. The update is the HD1a, and I disagree with Matt Burns that this is just a “we forgot to put some things in the first model so here is an update” update. The new features that Matt talks about are a 16:9 still-shot mode, and a 320×240 MPEG4 video mode. What he doesn’t say is that that video mode will be Video iPod ready! The camera itself features in-camera editing, so it will be a snap to deliver a quick instructional video to an iPod user.

This device uses SD memory cards for video storage, so these files are ready to edit on a computer that has an SD card reader. A 2GB SD card (currently about $80) holds about 40 minutes of the highest quality 720p HD video. Prices for these cards have been steadily dropping. Price for the camera will be about $700 and is shipping in September.