Thanks, as I mentioned my photography is where I want it to be, im happy with that and I definitely saw an improvement with the mkiii. Not just because its a better camera, photography isn't about that. But lets say you did a tutorial workflow with an image from a 450d and then did the same with an image from a mkiii you'll get two different results. But for video, as were discussing here, it just made plain sense to me to get a video camera and then work from there. But as the mkiii has an awesome sensor and video on it then it would make sense as you say to try get the best from it. From my experience so far which is very little with video, ive found it perfect if you set it up steady on a tripod and have the right lighting and environment, if its an on the move, or on a steadycam type shot I always find camera shake.
As for magic lantern I have been so tempted many many times to have a go but im always warey. And on a camera this price it's kind of always a no unless you are absolutely sure.
http://www.youtube.com/watch?v=TkfnuvcHYIo This was kind of interesting.
I think some practice further with the mkiii on video is needed, once I get going i'll throw up some youtube links. But as far as photography is concerned I think the mkiii is a keeper. That's not to say if theres ever a grand or so spare in the future I may not invest in the xa10 also.
Have you considered the 70d with 40mm STM pancake lens? The 70d does focussing in a way none I the other Canon's do whilst also having 14 cross type sensors, touch screen and wifi. It's a bit of a bargain I think and slightly overlooked still.