This is a powerful, easy-to-use, fairly cheap video camera; it records @ 1280 x 720, 60 FPS, and can hold about two full hours of video at that capacity. It fits neatly in a shirt pocket and is pretty much ideal for recording anything that doesn't need to be professionally produced film, from home movies to recording interviews. It comes packaged with a basic editing program that's designed to make it as easy as possible to produce basic home movies and post them to the web.
So far as that goes, it's a great camera, especially at the price. The only real problem with it is that the overall interface is fairly dumbed down -- for the sake of ease of use, they've traded away a *lot* of functionality. For example, it's easy to view the clips you've just recorded in the viewfinder, but you can't "fast forward" or "rewind" to a specific frame when you're not actively playing back videos, because there's only one set of "forward" and "reverse" buttons, and they also fill the "skip to next/previous clip" functions.
Similarly, the editing software is clean and easy to use, but lacks a lot of options. It's fairly easy to take a chunk of video, yank out a selection of favorite clips, and string them together into a movie, and maybe even put a title on the front and credits at the end, but anything more complicated than that ain't happening without third-party editing software. Perhaps most critical is the lack of a "resize" feature -- because this camera records at such a high resolution, even fairly short videos taken with it can quickly reach prohibitively high file sizes (two minutes of video from this camera took me approximately two hours to upload to YouTube, over a DSL connection).
All that's an issue because it seems, to me at least, that the only reason to purchase a dedicated video camera, in an era when everyone and their brother's cellphone already has video recording capability, is if you're at minimum a dedicated hobbyist. And if you're such a dedicated hobbyist, I would suspect that you'd want more bells and whistles (like focus and exposure controls, or better bundled editing software) than this thing has. What it does, it does great, I'm just having a hard time figuring out who the expected market is for this -- it records in higher resolution and better FPS than anyone who wants a casual camera for posting web videos really needs, and it lacks the advanced features that would make it appealing to dedicated hobbyists. The two-hour recording time and easy portability might make it very useful for people who want to record interviews or meetings, but archiving those recordings would be prohibitively difficult without, again, 3rd-party editing tools, due to the massive file size of the recordings this thing generates. The camera's best feature is probably the image stabilization, which works very well -- indeed, so well that I forgot about it, and just waved the camera around without even worrying about image shake at all. Because of that, this camera might be ideal for hobbyists who already have a full suite of editing software and are looking to shoot in uncontrolled conditions without a tripod.
The video to the left is an example of the sort of thing it's fairly easy to turn out with this camera -- you can see how it deals fairly well with indoor lighting conditions, has good color, etc., and you can see the "image stabilization" at work. I should note, however, that I did make two changes to this video using third-party software -- I reduced its resolution from 1280 x 720 to 640 x 360 and converted it to a .wmv file so that it would fit within Amazon's file size & format requirements for video reviews.
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EDIT: It's unfortunate that CISCO is terminating the Flip line, as I just finally discovered what this camera *is* perfect for: taking on vacations in foreign countries. I just returned from a trip to New Zealand, and this camera's high FPS recording rate made it ideal for capturing footage of wilderness, animals and birds that move quickly and are otherwise hard to photograph, and the like; it was easy to just take a half-second or so of video whenever I wanted a still photograph, and pull those frames out later with the Flip's software; it was easy and convenient to carry wherever I went, even along full-day hiking trails; and the camera's two-hour recording time was sufficient to hold all the video I took over the two weeks of the vacation. The lack of focus & exposure controls was still a minor issue -- sometimes it had trouble with varied lighting in panorama shots and so forth -- but the camera's automated adjustments were pretty good if not perfect, and I was able to grab a great deal of quality footage of my trip.
There was one minor issue with charging the camera's battery -- the battery life, at about a half hour to 45 minutes, is significantly less than the recording time, and it can be annoying to travel with rechargeable cameras because of the need for socket adapters and the risk of short-circuiting your camera due to varying international voltage standards. Because the flip charges via USB, however, all I had to do was find a USB charger with the appropriate socket and charging became easy.
So, all in all, I'm upgrading this camera to a full five stars. I'd still consider it a niche product -- traveling tourist videocamera -- but it's pretty much an ideal camera for that niche.