The latest in Libertas' series of "Put Up Or Shut Up", an excellent guide to indy film/digital video making, is online, and deals with audio. There are loads of great tips, including this comment right at the start:

Sound matters more than picture. If the picture’s fuzzy, out of focus, or gone completely, it’s better than bad sound. Bad sound immediately takes you out of the film.

And speaking of location sound, I've been having lots of fun with this product, Samson's Zoom H4 portable digital recorder. I'm not sure if I'd recommend it for the types of projects Libertas has been describing, but for location work for short video podcasts, it seems to do a pretty darn good job. The base of the recorder has a pair of XLR-inputs for use with professional mics. And for certain applications, it's small enough to hold on camera as a handheld mic itself, especially with the black foam cover over the two small condenser microphones located at the top of the unit. It records audio onto a Smart Card, which can simply be popped into the computer to import into your audio or video editing program afterwards.

It's also useful in the studio as well--I've been using it as a digital backup recorder for the Pajamas' Blog Week In Review audio podcasts, just in case.