Frame grabs off video are not great and this is because, in most cases, the recording is done using interlaced frames - the quality may look great on TV but when you grab a frame it appears to lose quality and, from what I understand, this is because a frame grab is made up of two interlaced frames - because the two frames are shot at differing points in time, you are going to have the blurring.
There is, however, new technology around - I haven't looked into this fully and have only just done a quick look around the web for info on the subject - but some of the camcorders around are carrying a new feature, known as
Frame Movie Mode (Canon) or
Progressive Scan (Sony) - this mode captures 30 non-interlaced frames per second, rather than the 60 interlaced frames of standard mode on these camcorders. Playing back footage shot in Frame Movie Mode/Progressive may not appear entirely smooth - something which might be quite noticeable shooting bodyboarding I imagine, however, the mode is intended to have a cinematic feel to it (a slight flicker), with the added intention that quality still images can be obtained from it for either web/print use. Then whether or not 1/30 of a second is fast enough to record action shots which are sharp enough --- maybe someone can help out with that? The fact, however, would be that it would have to be way better than standard frame grabs and then what are you wanting to do with these frame grabs? For the web at least, the resolution will most likely be more than ample.
I've only really had a look at info quickly on Canon & Sony which in my mind are the two of the leading camcorder manufacturers - a JVC vs Sony angle is covered in the third link below, it appears at least the camcorder mentioned in the article does not record interlaced video.
For the video quality itself, Interlaced looks better on interlaced display e.g. TV, Progressive looks better on a progressive display e.g. projector.
Most of the info I got from the following pages:
http://www.dvinfo.net/canon/articles/article1.htm
http://www.macspecialist.com:16080/canon/gl2/index.php
http://www.camcorderinfo.com/content/So ... corder.htm
Prices - the models I was looking at are some of the newer 3CCD models available - prices are quite steep and if you're looking at a water housing then you are talking some serious bucks. (Code - I know you were looking at some prices, so if you feel like sharing)
Did a bit of educating myself tonight, so hopefully some of this is also some help to you.