Hi RhinoGuy. I use a flip HD for all my dives and I'm pretty happy with it overall, with some strong caveats.
First, all of my recent videos here are shot with the flip: http://www.YouTube.com/d5kenn.
Second, you really need a wide angle adapter to get good video with the camera. The default setting is too much on the telephoto end, and with the additional magnification effect of the water, you'll have a hard time capturing much of a scene, or in a very steady way (handholding telephoto really sucks) without one. A wde lends will set you back $250, the underwater ikelite case another $250, and $150 for the Flip. For that $$, think about getting a small digicam with hd video, a 24-28mm wide end and the manufacturer's own housing; this route will probaby save you over $300, and give you a great digicam that does stills, has a flash and image stabilization.
Otherwise i'm quite happy with the quality, ease of use and output from the Flip, let me know if you have any questions I can answer.