We just got a Flip and have had TERRIBLE luck with it. Actually, I haven't been able to record a video at all because the dang thing doesn't work. Brand new out of the box and it doesn't work. I was really excited about it and we were thinking of getting one for DSS for Christmas, but we won't be wasting our money. It has a lot of good reviews and obviously many people have luck with them, but we have not. Not to mention that customer service has been less then helpful (I've had 4 different people give me the SAME advice on how to "fix" the problem - take the batteries out and leave it off for 72 hours - even after I tell them I've already done that).
IMHO, the Flip might be great if you want to shoot a bunch of short videos (a la
YouTube), but personally I would never have it as my "go-to" camcorder for important events. The newer HD models may have higher quality, but for about $100 more, you could get a camcorder that doesn't have the limitations of the Flip (such as battery life and limited memory capacity).
We have had our older model Sony Handycam for over 4 years now and we love it - it was under $300 when we got it and we purchased extras slowly over time (more batteries, chargers, etc.). It is small enough to fit in DH's "belly bag" or in my Bagallini when we are at the World and it is durable to boot.
And OT - IronGiant, you nearly made me shoot milk out my nose - I think my DH would keel over if I told him we only had 2 hours of recording time for vacation. I think we typically end up with about 30 2-hour tapes! He edits them down a lot after we get home, but he is a recording maniac!
ETA: That Kodak camera does look great - I will have to look into one of those instead!