I've read through the manual and haven't been able to locate a time lapse function. Is there one on this camera? the closest thing ive found is the simultaneous recording of a still image, but i think that only works with a single picture.

Nope. There isn't an interval record feature on either the XL H1 or the XH cameras. For Canon HDV, this feature is available only in the Console software.

There's DV Rack HD 2.0.
There's a trial version that just does SD, but I like it and it's worthy of checking out. Just be aware... there are plenty of posts about fouled up activation procedures.

Time lapse recording with digital camera is simple and very practical alternative since most of HDD recorders do not support time lapse in HD mode and recording with tape is not very healthy practice.

Some digital cameras like Canon G6 for example, include built-in intervalometer which allows 2..100 shots at 1..60 minutes intervals. Of course, it may be too slow for many applications but there come simple and very flexible programs included with cameras which can control the whole process from notebook computer or a PC.

Image size of 1600x1200 will do just fine for HD productions. It has to be cropped to 1600x900 to achieve correct aspect ratio. The procedure is simple and energy efficient, even more if you turn off preview on LCD. All recorded images can be imported to NLE/AfterEffects etc. as image sequence.

I was getting great results even with manual time lapse using my DSLR and remote release.

Just my 2 cents. I think this is very good alternative which does not engage camcorder.

ps. Crop to 1600x900 in this example is not even a formal step. Images can be simply resized and positioned properly in NLE.