I bought my son a Flip Ultra for his birthday, and I blown away by its awesomeness.
It's about the size of a cell phone, very easy to use and takes high quality video. It comes with software that lets you do a lot with your footage. You can slow the video down frame by frame and extract incredible photographs out of it. It cost about $150, and I purchased ordinary rechargeable AA batteries for it. We couldn't be more pleased.