Hi David,
I have to 2nd what Scott has already said.
Let me add that, FCP7 IS a professional system that Hollywood movies are edited on. As Scott said, you need to change your settings. I’m currently editing a doc on FPC7 with footage shot on film and transferred to ProRes 442HQ. That’s what my timeline is set to as well.
As far as what camera to buy or use, well, this can depend on what your final destination is going to be. This is where larger frame sensors matter. If you’re projecting on a movie screen, than you’d benefit from a 35mm sensor. If it’s for broadcast TV, than something in the 1/2 to 3/4 chip size would do. For internet, probably a pro-sumer camera with a 1/3 or smaller size imager will suffice. Again, as Scott said, there are a lot of other factors that can determine image quality, including lens quality, compression rate, and resolution.
Dave J