Most digital camcorders have some form of image stabilization. Image stabilization helps you to record videos that aren't shaky. There are two kinds of image stabilization: electronic (digital), and optical.
Electronic image stabilization uses the cameras image processing system to make the image appear less shaky, sometimes with slight loss of quality.
Optical image stabilization is usually only found in more expensive camcorders. It uses a system of lenses to make the video appear smooth. Optical image stabilization causes no loss of quality.