I have an SD camcorder (old). The newer HD camcorders are much nicer, but still suffer from poor low light performance as well as stuff like lacking interchangeable lenses and having too much depth of field. The low light performance of the 7D is in a completely different league, and in the right hands (not mine) is good enough for commercial work - music videos, documentaries, indie flicks, etc.
However, the biggest problem for me had little to do with quality. It was just the fact it was a PITA to carry a second camera around. And if I can only take one camera, the still camera always wins. Now I can take both.
P.S. One cool thing about the 7D is the video is already captured as QuickTime compatible H.264 .mov files. With DV you have to capture it, and with other formats you often have to convert it. I'm soooooo glad the files aren't AVCHD or HDV or Motion JPEG AVI or whatever.
BTW, with regards to both AVCHD cams and HDV cams, the 7D's bit rate is way higher. AVCHD camcorders IIRC are around 24 Mbps H.264, whereas the 7D is twice that at around 48 Mbps H.264. That's actually higher than Blu-ray. As for HDV, I believe it's 25 Mbps, but only using MPEG2.