I have used other versions of the inexpensive camcorders like the Aiptek A-HD and Jazz HDV178, for about the same price you get removable SD card memory and 720p HD video.....but The Flip is nice and compact and idiot-proof, and even uses a decent video encoder chip (I use the same one in one of my products, Zoran COACH 8M)(640x480 @ 30fps TV quality). Will indeed not look super-fantastic on an LCD screen but definitely works okay for YouTube and even DVD creation.
Does the one you got have the tripod mount in the bottom? At least it makes it more versatile.
The Flip Mino HD just came out, interested to see that one perform, a bit more at $229, but it may have the new Zoran COACH 10P chip or the Ambarella (like the Aipteks) for good encoding and minimal compression artifacts, for the price.