One of the worst designs for the DSR-250 is the audio input. The AUTO setting is better than many camcorders, but we all know manual must be used to prevent noise. Unfortunately, if you hit the top of the audio on a 250, it does not just clip the peaks, The peaks actually go negative, making the audio terrible!

To correct, I must record lower than I like and then use software (I use Sound Forge, the compressor in Premeire is worthless) to compress and then boost the audio before it goes into the editor. Unfortunately this increases the noise floor which is very high on a 250. Better yet, I use a compressor between the mic and the camera, which means I also must use a small mixer as a mic pre-amp.

I wish Sony could just put in some good compression in the front end of the 250; but they didn't, so make sure you get the extra hardware when audio is critical.

Dan,
I believe the audio cuircutry is the same or at least close enough to the same as the PD150. Having 2 of the 150's I can tell you it sucks. (IMHO only)
I NEVER use AGC, it peaks really hot so it's manual audio and I watch the levels all the time. I keep the peaks to -12 at no more than 50% on the meters. Usually at wedding receptions I set the switch to mic att, that lowers the input by 20db and then make sure the peak is NO MORE than -12db and you should be OK.
HOpe this helps
Don