We did a lot of testing of the smooth-slow-motion feature (we use a Sony-V1) for sports but found it unusable.
It's a nice "toy", but the resolution of those clips is less than SD and upscaled in-camera to DV or HDV size plus it has very strong compression artifacts.
The trick in producing slomo-clips with a "normal" camcorder or a DSLR is to record with the highest available framerate (with DSLRs it's 60p, with the Sony Camcorders like the Z5, it's 60i with NTSC models and 50i with PAL models) and then slowing the footage down in post.
Most NLEs do this quite well. If you want to push quality even further, you could use After Effects and it's pixel motion feature or you could use plugins like Twixtor.
Increasing the shutterspeed helps when using those plugins, since higher shutterspeed means less motionblur and that helps with interpolation frames without (or with *less*) interpolation artifacts.
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