Two things, I’m in PAL land and I’m a Vegas not FCP user. That aside from my tests downconverted HDV leaves BetaSP for dead. Then again down here I can buy two second hand SP cameras (with glass) for the price of a Z1, so I guess I’m not alone in my evaluation of relative quality.
I find that HDV downsamples very nicely to SD 4.2.2, not having to deal with all the issues of A->D conversion when editing SP is also a plus, with HDV you stay in the digital domain from start to finish and also avoid many generational loss issues that you can have with SP. That’s not to say that HDV is without issues and you might have to learn to deal with certain issues related to HDVs compression system. Still I think you’re going to have to deal with the transition at some stage if you want to remain competitive.
Certainly beg, borrow or hire a Z1 and do your own tests.