Hi!
First and foremost, regarding the Flip cameras, I have one as does my DH. They are easy to use, stupidly simple to download from and do indeed have zoom. They also have a pretty decent low light capability and the sound quality is also pretty good, especially from something that is about the size of two iPhones stacked on top of each other.
That is the upside, the downside is that the company that bought the manufacturer is apparently discontinuing production of them. Make sense, they are currently the most popular and fastest selling of all camcorders so they should absolutely dump the product line, right?
As for what to upgrade to... downloading from an SD or SDHC card is indeed easier than having to do a real time capture from a DVC tape however... there is compression (read that loss of data meaning the information that creates the image you see) on any memory based system and dvd based cameras are the absolute worst in this regard. So, while tape is slower to transfer it is still the preferred method for capture since you actually keep more of the pixels that you shoot.
Of course, if you aren't planning to film the next James Cameron spectacular with your camcorder and really just want to make sure you have something to catch those once in a lifetime family moments (or that potentially viral video gold

then a few pixels here or there might not be a big deal.
If you are looking for something in the size and pricerange of a Flip Video camera but are leery of buying an actual Flip camera, you might want to take a look at what Kodak is offering. They have some really snazzy HD video cameras which are every bit as easy to use and, owing to the current Cisco nonsense (owner's of the Flip Camera brand), should have support available for your purchase if you need it.
One thing I would also recommend your looking for in whatever camera you purchase is the ability to remove and replace the battery since having to have your camera tied to the wall or a usb port because the internal battery pooped out on you will seriously cramp your style. That is why, in the case of my Flip camera, I choose the Flip Ultra HD and NOT the Mino. The Ultra HD takes either a rechargable Flip branded battery (included) which charges off your computer's USB port or two AA batteries (which you can get pretty much anywhere - a real boon when you are, say in the middle of Fantasy land when your camera decides to take a powder.
I hope that helps. Take care, help lots of people and have a "Wonder"ful day!
Tisza