The Ultra shoots 640x480 resolution video at 30fps, compresses it using H.264, and encodes it as MPEG-4. The unit doesn't have a memory card slot, which is too bad, but its 4GB of internal memory, up 2GB over its predecessor, allows you to record 2 hours of video. That should be ample recording capacity for most folks, but if you're on a vacation and shoot a lot of video, it would help to have a laptop along for the ride to offload your video as you run out of memory.
As with all Flip Video camcorders, shooting and transferring videos to your computer or uploading them to YouTube and other video-file-sharing sites is a breeze. Flip has generally nailed the whole simplicity thing. You hit the red button to record and the play button to play back videos. There's 2x digital zoom onboard (don't use it), but nothing in the way of manual or advanced settings, not even a still-capture mode. However, you can pull stills from your video using the software package that's preloaded on the unit.
For the type of audience these budget camcorders are targeted at, having few choices and menus to toggle through is a good thing. It's also good that Flip's software comes in both Windows and Mac versions--both systems are supported. That software offers basic editing features, but you can always import your video into another video-editing package, including Apple's iMovie.
As for video quality, the Ultra produces decent video for a low-resolution model. At small sizes (read: not blown up full screen on your computer display), the video looks pretty sharp, colors are well saturated, low-light performance is decent, and sound is loud enough. For best results, you do have to keep the device very steady while shooting.
There isn't a big difference between the video quality on this model and the original Ultra, but it is slightly better. We should note that this model has the same optics and image sensor as the Mino, but Flip has managed to refine the video processing via software to improve the image quality.
Be forewarned that while we're praising the video quality, it's still not great--and blown up to larger sizes it looks fairly soft and pretty noisy. But for shooting Web-based video, it's relatively decent. (For a comparison of the various Flip models, the company provides a comparison chart.)
The big question for a lot of people is whether to step up to the more expensive UltraHD or save some dough and go with this model. If you can afford it, you should probably opt for the UltraHD--or MinoHD, if you want a smaller camcorder. The higher resolution gives you more flexibility to scale the video to larger sizes. Ultimately, what will make this camcorder compelling is its price. If the street price hits around $120 or less, it starts make sense as a purchase.