This a great camera/camcorder for the price, and it works as advertised. The other users who have had bad experiences probably got defective units, but mine is working great. I would suggest exchanging them for a new one. Also be sure to use quality SD memory cards and have the latest firmware. My thoughts below...
I took this camera with me on a tropical vacation with the intent to shoot underwater photos and videos, and it worked out great! There is an option in the settings menu to color-correct for underwater use. If you don't turn this on, your photos and videos will come out with a green tinge. Remember to turn this on for underwater use!
There are 4 different options for video shooting: 1080p, 720 at 60 frames per second, 720 at 30 fps, and iPad compatible. The 720 @ 60fps looks especially nice and crisp with the higher fps setting. Use this setting for videos that you expect to have a lot of movement in. The 1080p will look choppy when panning around too quickly or shooting video that has a lot of movement in it. The 720 @ 30 fps and the iPad compatible settings are geared toward shooting video where there isn't a lot of quick movement. Even though the 720@60 setting produced the best video, I found myself using the iPad compatible setting the most. The file size for this setting was the smallest, and the video quality was still very good. I was very impressed with the results. I used a 16GB Sandisk memory card with this camera. At the 720@60 setting, you are able to record up to 2hrs and 45 mins of total video footage and around 12000 photos. Your mileage may vary.
The camera function leaves something to be desired. Although it takes good-not-great photos (that's what your point-and-shoot camera is for), I recommend taking photos during the daytime and un-zoomed. The photo quality during low-light conditions or at night is extremely poor and very grainy. This is strictly a daytime or bright light camera. Also, the photo quality degrades significantly if you use the zoom function even in bright daytime light. I suggest not using the zoom at all and shooting during the day or with lots of light. The nice thing about the ZX5 over the ZX3 is the macro focus function. If you want to take photos of objects that are very close to the camera, select this function.
Reading some of the other reviews, some of the complaints centered on the access flaps for the memory card not opening properly after use in the ocean or saltwater. The manual recommends rinsing the camera with fresh water and pat drying after exposure to saltwater. Here's a trick I used on my vacation: take a ziplock bag with you, partly filled with freshwater. After using it in the ocean, drop the camera in the ziplock bag of freshwater to keep the salt from forming and gumming up the hinges of the access flaps. Dry it and clean it off when you get home. I recommend thoroughly rinsing it and drying it with a towel, and then opening up both sets of access flaps to dry completely.
There are sharing funtions on the camera that I did not use and turned off in the settings menu. I don't Youtube or Facebook so I did not explore these features.
When unloading the photos and videos, unfortunately you cannot just remove the memory card and put that into the card reader in your computer. You must use the ZX5 to unload them. Hook up the ZX5 to your computer with the USB cable and turn it on. When the computer detects it, it will want to install software. You DO NOT have to install the ZX5 software to unload your photos/videos. Just open up the ZX5 from "My Computer" like you would a USB memory stick and copy/paste your photos/videos over. It's much simpler to do that than to deal with the software.
I also do not recommend using the on-camera video editing feature. For videos that are long, the trim feature will start to lock up on you. Offload the video onto your computer and use other video editing software to do any trimming or splicing. Short video clips won't have this problem.
Inside the box, there is an offer for a free HDMI cable if you send in a registration card. Not everyone has HDMI on their TV or computer, so I can understand why they don't include one already.
Final thoughts: it is a great camcorder for the money. It is extremely compact, shoots terrific video (underwater or on land), and does a half-decent job as a regular camera. For those of you complaining about the photo quality, understand that you are using a $120 camera. Go get a thousand dollar DSLR if you want excellent pictures. This camera is perfect for those of you who want to take it on vacation or camping with the chance that you'll be getting wet. Remember my tip to take a ziplock bag of freshwater if you plan to go swimming in saltwater!