Having always found time lapse videos to be quite interesting I have enjoyed making the odd one with my Canon PowerShot S2 IS, which can crate time lapse photos up to 100 shots before having to be told to start up again, I recently made a couple using our new Canon EOS 40D (which is back from Canon service in perfect shape!) and tethered shooting from my wife's PowerBook G4. This gives me not only higher quality images, more options for shooting (lenses, etc.) but also gives me up to 1999 photos per session with Canon's software.
I figured I would share my tips and thoughts about making your own time lapse videos in this post.
Obviously the first part of taking a time lapse video is to pick a good subject. One must remember that the same area will be photographed during both the day and night (unless you're making shorter videos), therefore one must pay attention to where the sun will be in the frame and aware of any potential glare in the video as the sun travels the sky. This usually isn't much of a problem if you can open your window, bu t if shooting through one the reflections can totally wash out parts of a video (see the linked video below) and cause you to loose a lot of detail.
As for choosing a camera, any model that takes decent photos and can either be set on a repeating timer or be controlled by a computer with that function will do nicely.
If you want to shoot into the night you might want to consider a DSLR. Most cameras will not choose an exposure longer than one second in auto mode unless you have a DSLR and a long exposure is needed to capture the right amount of light during the night. Canon's DSLRs will choose up to 15 second exposures where all their other cameras will only choose speeds as long as one second.
My standard settings are:
Power: Obviously a power adapter would be the best choice, but if you don't have one I suggest you have two batteries to keep you going should one fail. My 40D batteries only take ~90 minutes to charge and one can easily run the camera for hours.
Image size: Largest, highest quality JPEG. Not RAW. Normally I use RAW format for all photography, but the benefits of RAW aren't really need here and only add to the file sizes. When taking thousands of photos the difference between a 3 MB file and a 14 MB one are very significant!
ISO: Lowest possible. ISO 100 in most cases.
Shooting mode: Aperture priority (Av) mode with a setting of f/5.6-11. I usually use f/11 for the highest quality photo and most depth of field for the scene. Stopping down the aperture also greatly reduces purple fringing on strong light sources.
Focus: Always manual. Get what you want in focus and switch to manual focusing. Not only does this save a little bit of power but it will prevent your camera from shifting focus and creating the appearance of someone moving the camera around.
The video can be seen here