You're right that live-switching multicam is a big time-saver. If your cameras retain iso backup recordings, you can still go back and edit out mistakes in the live cut, but that is relatively rare, and still faster than doing a complete multicam edit.
The Atem is popular right now, and you can find refurbed ones in that price range. It's got to be partnered with a suitable computer, though, and you may find that once everything is put together, it's not any cheaper than a stand-alone hardware based switcher like the Edirol V4.
I personally have had nothing but grief working with the BM recording application. We went with kiPro hard-drive based recorders and love them.
This is a new, interesting gizmo in your price range; have you seen it?