I love my FlipCam. I've been keeping a video diary of my startup on it, and I also used several to record my vacation to Australia and New Zealand in October.
I don't think you need super-high quality, even though the FlipCams are HD. Content counts more than style or featureset. What I like about the FlipCam is ease of use, portability, and connectivity to various video-sharing services.
The vacation was a bit of a testbed. Everybody in the family had a FlipCam, and we posted to the net a lot. After a few days, however, we realized that some sort of post-production really helped make the video much better. So I started using Camtasia Studio for basic titling, popups, splices, and transitions. It also allowed me to tweak the codec settings when I rendered the file, which was nice.
Another interesting lesson: the more you film, the better you get. At first everybody was stiff as a board the second you turned the cam on. Must be some kind of hangover from the still camera days. But after a dozen or so shots with us all watching the results, we realized that relaxing was the only way to go. The videos got a lot better at the end.
Here's a sample of the more relaxed video we got at the end of the trip instead of the start: http://www.vimeo.com/7121046
EDIT: I'm a bit of a movie buff, so this is a pet topic for me. I know that you're receiving conflicting advice, and I really can't emphasize enough how content trumps style. We found the the emotional context of a piece -- setting, reactions, flow, body language, vocal inflections, narrative -- win out so solidly over technical attributes that you can shoot a great video on the crappiest equipment imaginable and it will still be great video.
I could point to major motion pictures going the handy-cam way, like Cloverfield, or I could point to the popularity of amateur internet video, or even America's Funniest Home Videos.
But I won't.