for the money, a MiniDV camcorder is the best option IMO. direct connection to computer via firewire/ieee 1394 cable. you can pick up a MiniDV camcorder with the highest available optical zoom (40x) on the market for any camcorder for $300. 34x optical zoom for $250. a MiniDV camcorder will take great video and doesn't cost an arm and a leg.
the next best option would be a camcorder with built-in hard drive for storage. video can be directly uploaded to the computer via USB similar to a regular digital camera. the least expensive you'll see one of these is $400 on sale. that market really just gets going at $500-$600. the optical zoom standard here is currently 10x. so basically, you are paying a lot more for the hard drive function (vs. MiniDV tapes or DVDs) and sacrificing options...such as zoom. to get one with a decent amount of storage space, you're going to pay a lot more than $500. once the drive is full, you have to upload it to your computer or burn to DVD so you can continue filming.
DVD camcorders are priced higher than MiniDV, once again with less features and less overall value. they are great if all you want to do is record and slap in the DVD player right away. if you are interested in editing the video at all, it's not a good option. you will first record to the DVD, then you will need to buy software to rip the dvd info to the computer, then you will need more software to convert the file into something you can manage on your computer with editing software, edit the video, and finally record onto a second final DVD. in the end, it will take 2 blank DVDs, and 2 pieces of software...all on top of the initial purchase price.
no question i prefer MiniDV to the other two recording formats (Hard Drive and DVD). they are the "older" technology/media so MiniDV is priced a lot cheaper, you get more functions and options for half the price of other media, when you run out of recording space out in the "field" you just swap in another tape...you don't have to immediately upload to your computer to free up the space, etc.
for you, recording drag racing, the main thing you are going to want to shop for is optical zoom. you are going to get the best zoom possible going with a MiniDV camcorder. you will miss a lot of possible close-ups down the track with a hard drive camcorder with only 10x zoom.