Out of curiosity, my friend has a digital camcorder and he says that he is able to take pictures with it as wel as record movies. Why doesnt everyone just get a Canon digital camcorder and not care about cameras because camcorders can do the same thing?

Like everything else, these things are a compromise. Camcorders don't take great photographs and digital cameras don't do very good videos. Perhaps someday there will be cameras that do both very well.

Digital cameras (at least the better ones) have a lot of flexibility in setting parameters like white balance, file format, etc.

The latest thing is the mini tapeless digital camcorder that writes to electronic media (flash cards). Within a few years these things could well be the answer for those folks who want both a camcorder and a camera in the same unit.

Mostdigital camcorders around still don't take pictures as good as an inexpensive 2 MP camera.