When I film neon signs or any type of lighted sign I get bleeding and the image/sign is not clear. Is this normal for DV or is there a proper setting to use.

Always shoot in manual mode and play with the settings. Also, manual focus. Your camera is trying to figure out what to focus on with all of the light in auto focus mode. In manual, you can make it focus on the object at hand. I may go out and video some tonight to show you what I mean.

Once you try shooting it in manual, you will be set!