That sounds very much like a faulty CCD unit - the "part" that transfers the image from the lens to the tape, especially since you say it will record sound! This will be a Sony repair option and, if it is the CCD unit, then the repair will be free - yes, even after 5 years!! Go to this web site
http://esupport.sony.com/perl/news-item.pl?mdl=DSCF717&news_id=118
and carry out the test procedure. It is an American site. If your camcorder DOES show this problem then go to this site (GB- IF you are in UK!!)
http://www.sony.co.uk/view/ShowArticle.action?articlesection=1&article=1144943030573&site=odw_en_GB
and download the "Repair Request Form" - towards the bottom of the page.
The USA site - as is often the case - provides the better troubleshooting info!!!
Ray Peate
April 2007