Not stupid questions at all!
Yes, you can take videos with some (probably most now) digital cameras, but not all. I'd suggest the Canon Elph Series, we currently have a 5 megapixel SD450 model, which is small and compact, and can do videos too. It's around $308 + shipping right now on Newegg.com (though you'd have to pay CA state sales tax if you bought from there)
Here's the link:
http://www.newegg.com/Product/Produc...82E16830120174