This was a big deal before the rise of the smartphone. No cables. Great video (relatively speaking) even in low-light conditions. Good audio. Simple interface. Inexpensive. I used it for work (online publishing) and my kids loved it, too.

Compared to the Japanese camcorders that required cables, cassettes, and an 80-page manual to figure out, the Flip was a no-brainer for people who just wanted an easy way to shoot video and get it on their computer.

But, as others have noted, what the heck was Cisco thinking? IIRC, the company wanted to push into expensive "telepresence" systems but I don't see how the Flip fit into this vision.

ETA: My pet theory is Cisco corporate strategists or the CEO believed the spin put out by Flip and its investors. Maybe another company was circling, too.