I love the quality of my flip. Unless the wind is blowing, the sound quality is really good and the video quality is good, as long as you mount it on a tripod, or sit it on a table top. And, yes, you can buy a waterproof housing (I should get one) for about $35. I have the HD 30 frames/sec 2hours of shooting.
Downsides:
-forget about using the zoom. It diminishes the video quality greatly.
-not waterproof, so you have to lug around WP housing for water stuff.
-has a tendency to get bumped to "on" when in my pockets or a tote bag, killing the battery supply. (needs a lock for the power on/off)
-terrible battery life. The built in card can hold 2 hrs of footage, but the rechargeable battery pack goes dead after about 45min. Can replace with AA batteries, but they seem to last for only about 30 minutes. (they really need to address that)
-- the flip out USB plug kind of sucks for charging and downloading, especially on Macs, because it blocks the other USB jack so you cannot download directly to external disk, unless you buy a splitter USB jack. USB is also how you charge the battery pack.
- get ready to buy a new portable hard drive because video takes up lots of space.
upsides:
- great quality 720 HD video and audio is very good, except in windy conditions.
-built in, easy to use editing software, and can work on higher end software like Premier Pro and Final Cut Pro.
- uses regular AA batteries in addition to rechargeable battery pack.
- comes in custom graphics and custom colors if you buy from Flip.
-made by Cisco (quality company)
- cheap! lots of value for the price
*****
They now make an HD which shoots 60 frames /sec, but records only one hour.
Also make the Minnow, which is tiny.
I'd buy a Flip over a Kodak any day of the week. Kodak really took a nose dive after digital cameras came out. They didn't know what they needed to do, and they lost their focus.