Alrighty then... Given the nature of your questions I get the feeling that you might be getting in a little over your head with this particular project. That is not to say that it can't be done, but you will have a good amount of homework to do prior to starting production, and really prior to getting very far with pre-production. But lets see what we can do for ya here...
1. Top three cameras to get for a reasonable price (think around $700)?
In that range you're limited to standard definition (for the most part). Though you should be able to find something decent. I don't know the going rates of all the cameras in that range, but you might find a good deal on a used camera.
The Canon GL1 and GL2 have been touted as being nearly indestructible, so that would be a solid investment -- and the picture ain't bad either.
Panasonic makes some very nice cameras that you could probably find in that price range, the PV-GS series, I had a PV-GS200, the newer ones to look for would be the GS320 and GS400.
If you can find the money a dvx100 is a GREAT camera, but it's probably going to be about double the price range you're looking at.
The basics you want to look for in a standard definition camera are 3 ccd chips, and a mic input. Those are pretty much requirements. Well more or less, you could make a decent film with less of a camera, but a camera with these two elements would be a better purchase. After that, manual control of focus, shutter speed, and aperture is preferable.
However, in the HD arena, the Canon HV20 (my current weapon of choice) can be had for right around the $700-800 mark these days if you shop around.
It's about the only high definition camera you can get in that price neighborhood, and it's a sweet little machine. It has some unconventional workarounds to get full control over the image, but once you've got that down it's not a big deal. (Basically you have to fool it into thinking you've got a certain exposure level in your shot, then lock the exposure -- This takes me all of about 5 seconds, and only has to be done when the camera has been shut off)
2. How to get that "hollywood" feel... is it filters, or is added in post production?
First and foremost, lighting. Every film, television show, etc that you have ever seen (that was professionally produced) has had a significant effort put into lighting every single shot. Lighting is by far THE most important aspect of making a film -- second only to the STORY.
Even if you did nothing else, a properly lit video will look more filmic than 90% of the crap you see on YouTube or elsewhere online.
Second is frame-rate. Film uses a frame rate of 24 frames/second (or often times 25 frames per second in Europe). This is slightly less than standard television (30fps, or 25fps in Europe). The images aren't quite as fluid and Prime-Time Nightly News looking. Having a camera that can shoot 24p (or 24F on most Canon cameras) -- That is 24 progressive frames/second rather than 60 interlaced frames that make up the 30fps (or 50i/25p in Europe) standard video signal.
Third is color timing. This comprises a number of things; proper white balance (or white balance to something that isn't white for a different "look") -- this is done in camera, primary color correction -- making the images look the way they should, matching all the images between different takes and shots in a scene so it looks cohesive (done in post), and secondary color correction which is where you tweak the image to say, change a car from green to blue, or give the whole film (or a whole scene) a particular "look".
There's a few more aspects to it.. proper camera and actor blocking, scene composition, etc.. but those are the basics. (See my next post for books and such that cover all of this)
3. How do I do sound, I know it has to be recorded sepratly so how does that work?
Some people record to external devices, like a dat recorder, or some kind of flash memory based recorder (Zoom makes a couple good ones that are fairly inexpensive).. But, if you purchased a camera with a mic input, you can run your sound right into the camera and not have to worry as much -- it will be recorded in sync, and when you import the video you'll get the audio too.
If you do record to an external device, you MUST use a clap-board (or slate) or some other audible & visual cue at the beginning (or end) of each take to properly sync up the sound in post. It's much easier to record audio directly into the camera, so I'd recommend you do that.
4. How/What to do to get permits for explosions/car chases?
How to get them... Talk to your local film board/film office. Look in the phone book, most places have one, if not talk to someone at city hall.
You will almost certainly have to have an insurance policy for the production, and your schedule will need to be solidified before you can pull a permit for a location on a given time/day.
A word on explosions and car chases. If you do not have a licensed pyro-technician on set, you can't do explosions for real. Can NOT! Composite them in in post instead. Car chases, same deal... You'd need trained stunt performers to choreography and perform the chase. Unless you have a significant budget -- which I can tell that you do not based on what you're looking to spend for the camera and the overall tone of these questions -- you can't afford it. Rewrite the script to things that are easily, safely, and legally doable.
5. How do I find/get actors/camera men/cinematographers/hair and makeup artist in my area for a film?
This one is pretty easy. Post crew and casting call notices on classified sites. Specifically on
Craigslist and
Mandy.com
6. The movie has alot of gun shooting in it, would it be better to get airsoft guns and add the sound/muzzle flash in post, or spend twice as much and get blank firing guns?
Unless you have a licensed armorer on set, you can't use blank firing guns.. You'll never get the permit, and trying to do it without is a death wish -- Cops WILL shoot you. Even with airsoft guns, it's always best to talk to the police and the city prior to a shoot (and don't call it a shoot when you talk to them, some people don't react well to that..) Pull a permit if needed, but mostly just get their OK to do so, and this way they'll also KNOW what's going on, just in case someone calls about miscreants running rampant in the city brandishing guns they won't show up weapons drawn. That's a bad day right there.. Even with airsoft guns -- they look real, even with the orange tip, a cop very likely will shoot you.
Don't play around. If you can avoid the use of guns entirely it will make your life easier. If you are shooting indoors at a private location, it's not as big of a deal but you should still treat every airsoft weapon with the respect of a real gun. Incidentally it should be said that even a blank firing gun can injure, mame, or kill you. (Remember
Brandon Lee?) Even properly loaded with blanks, something still comes out the barrel of the gun. Any kind of projectile can cause injury or death. You do the math.
7. What post production editing/CGI software should I get?
This depends on what kind of computer you're on.. for a mac, you'll be looking at Final Cut (Pro or Studio), OR Premiere since it's being made available for intel macs.
On the PC side, you have more options with the primary two being, again Premiere, and Sony Vegas. At the end of the day all Non Linear Editing programs do the same thing, none is any better than the others -- it all comes down to personal preference.
On the visual effects post production side of things, there is a plethora of software to pick from. It all depends on what you're going to be doing. You may or may not need a 3d graphics program (like Maya, Lightwave, Cinema 4d, etc)
I use After Effects, which really can do just about anything.. Look at the list of credits of films that
The Orphanage had a hand in the effects on to get an idea of what can be done with AE -- until recently it was all they used, though they've started using another program (Nuke or Fusion, I forget) recently too.. Shake has many of its features, Shake and Motion combined have more of the feature set that AE has, but really AE still leads the pack for overall power and flexibility. Some people aren't terribly fond of the timeline based environment though and prefer to work with Node Based systems (like Shake, Combustion, Nuke, Fusion, etc)
(the real trick to getting the hollywood look is to spend a lot of money)