Wow dude,
I sympathize with your situation. I too run a small production company, so I understand your pain with the new hire. But use your skills to bring this guy to another level. It will show your professionalism and integrity.
As far as the camera goes, the XL-2 is newer and better than the XL-1. I’d go with the XL-2!!!
But it all depends on what you are shooting. There are so many new cameras out there. But the bottom line is, if the operator knows what he/she is doing then you have a good chance of success. If the guy is clueless, then it doesn’t matter what camera he shoots with.
DV is a lower format than beta. It’s less expensive though. And if you are not doing broadcast stuff. You can get away with the canon XL-2 or the panasonic DVX-100A.
You can determine that you need beta for the high-quality, high-priority clients. That will allow you to skip the son-in-law’s skill level, without offending anyone. And the boss will probably want you to hire someone out for an important high budget client.
hope this helps you!
p.s. – you in L.A?