The first decision you need to make is whether to go for a camera that records onto tape, DVD or a built-in hard drive. Firstly lets dismiss the DVD idea because it makes the camera enormous and you're going to want to edit your video rather than using it as it comes.
Tapes: I use them because I video professionally for research purposes and I need to keep absolutely everything I record. The tapes themselves are pretty cheap nowadays - I think I usually pay about a tenner for a box of five. The disadvantage with them is that you're limited to the amount of footage you can shoot per tape (60 or 90 mins) and running the tapes into your computer to edit is quite time consuming.
Hard drive: you can set different levels of quality so you can record for much longer periods of time and the camera will act like an external hard drive so it's quicker to transfer the data for editing. However, you'll end up with some pretty large chunks of data and if you want to store it at high quality it will swiftly eat into your computer's memory. I'm about to have my first experience of one of these as my daughter just filmed her school play on one last night. I'm going to help her edit it over the holidays so I might give you more feedback later!
To morph drawings, photos and video sounds like a really cool idea - it's not something I've done but I suspect you'll need good software to deal with it. It'll need to be able to create multiple layers of images and video that you can fade from one to another and have filters that will apply effects to your video. If you have access to a mac then I'd highly recommend Final Cut Express which is the cut-down version of the pro software I use and is fantastic. If you're on a PC then maybe someone else can advise ... ? Don't spend all your money on the camera. You can shoot really good footage with a fairly cheap one. Save some money for decent software - it'll pay off.
I look forwards to seeing the results!
Nicola
PS To get it onto the internet - youTube is what you want! Once you're at that stage read their help pages which recommend how to compress it for best quality and performance, but you're a way off that yet!!