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I was dubious about buying one of these. Two reasons, I already had a good camcorder and my son (who is really interested in YouTube) was already using a normal digital camera in movie mode and the quality was OK. When I saw one on ebay for a smidge under £55 I thought it would be worth a punt though.
The camera is very small. If you have ever had an iPod Mini, it is about this size. The actual size is 55mm(W) by 100m(H) by 15mm(D) and with the battery installed it weighs 84.5g. The battery is pretty tiny and like you would find in a mobile phone. It is a 3.7V lithium ion 680mAh cell, so not very powerful at all. This in practice lasted about 2 hours, which included taking videos and playing some back (and deleting).
It has 2GB memory on-board, that's it, you cannot add more. This is a shame as an SD memory card slot would have been so easy to incorporate.
Vado Software is provided for Windows Vista or XP SP2. Mac users are still OK, as you can drag the video content off the device and view with Quicktime player. I am a Mac user and it worked fine. Dragging to my hard drive, then importing into iMovie was very straightforward.
In use the screen is nice and clear. It measures 50mm across the diagonal and is very sharp. Much better than using a mobile phone screen for video capture as it has a nice fast refresh rate. The menus are very simple, for setting date & time, anti-flicker (which doesn't seem to make much difference), language settings and a video quality setting. The two quality settings HQ and SP both result in the same 640x480 capture, just the HQ looks a little better. You also get a 2x digital zoom, which is OK, but not much use.
The built-in mic is good though. However, the speaker is a little low on volume when playing clips back. The flip-out USB connector is also a bit of a botched design, neither staying out well, or pushing into the Vado's body completely flush.
Video quality is good though. No better than a decent mobile phone, but I suppose it is the convenience of a tiny device that is dedicated to one use. If you have a decent mobile phone that does video, my advice is to save your money. However, this is great for kids or a tiny little camera for those beach holidays where the more expensive camcorder often gets left behind.