I knew there would be a couple of downsides. First of all, there's no image stabilization, so if you don't hold your hand steady, things can get a little shaky. Another downside is that there's no zoom. I considered waiting to see if the price would drop on something like the Canon Powershot 780IS (a fancy point and shoot camera that does HD video and has image stabilization). But since my main priority was to get something that was super-easy to shoot and share video with (and pay under $100), the Vado HD won out.
Turns out it works quite well! The video quality is quite nice, better than my old (non-HD) camcorder. The image stabilization isn't too big of a problem since I'm just taking family movies. I like being able to plug the Vado into the HDMI port on our tv and watch videos right away. And the software installed on the Vado for uploading to Youtube and Photobucket is very convenient.
Here's a video that I made while playing around with it. It's a tour of my home office and boardgame collection.