Chrispy,
The pjpeg seems problematical. There has been quite a lot of discussion about a “PJPEG 75% Quality Hack” that allows RT Extreme funtionality with that codec with Kona products. Don’t know if it works at 720P resolution. You should be able to find posts about it by searching posts.
Why not offline with DV? This takes you down to a quarter of the file size of the HD. You pose an interesting question. Maybe nobody on the board has had reason to try it.
-Tom