Just needed some help understanding. After reading through the manual and specs, I still can't determine if the PDX10 has an onboard microphone other then the XLR, something like the mic on the TRV950. If so what sort of quality does it offer? If not is there an option of using a smaller more compact external mic?

It has two tiny built-in mikes just under the lens, on the front of the camera, providing a stereo pair when the XLR box is not connected. Haven't really evaluated the quality, but the do work. I would imagine these are the same mikes found on the consumer version of the camera, the TRV-950.

thanks, that's exactly what I needed to know.

Just had another look at the camera now that I'm back home... it also has a mini phoneplug for an external mike that says "Mic (plug in power)". That plug is also on the front of the camera below the lens. The XLR box attaches to a bracket and plugs into the hot shoe on top of the camera.

does it have a headphone out?

Sure, there's a mini phoneplug for headphones, just like every other camcorder. But this is on the camera itself, not the XLR box...