Short version: Overall, an ideal gift for just about anyone and probably the best music player I have ever used. If you want to spend more money - don't buy another player, just invest in some better headphones and a big micro SDHC card.
Long version (because I love listening to music and can't say enough good things about this gadget):
Pros: So many it is hard to know where to start. Here are some highlights:
1. Unbeatable bang for your buck. (Except maybe if the older clip+ is sold off cheap....).
2. Physically, it's smaller (and lighter?) than a matchbox - great for always having in your pocket or bag. Secure "clip" (of course) so handy for gym, running etc. Jazzy colours are available to put you in a good mood even before you switch on. Decent and bright colour screen to display album art, so easy to see at a glance what you are listening to, which for me was a problem for me with the earlier clip+.
3. Sound quality. This is excellent. In my view, on a level playing field without using their equalizers and on the same 'phones, this player sounds better than any iPod I've listened to and better than my own more expensive Sony S and A series players.("Better" is a subjective thing - so perhaps I should say in my opinion it sounds just as "clean", "detailed", and has enough "umph" and "bottom end" compared to much dearer players).
4. Getting music on it is dead easy by drag-and-drop. No need for special software like iTunes.
5. FM radio with RDS station display. Radio uses the headphone cord as an aerial and works with other `phones.
6. Supports the common music formats, inc mp3, AAC, and FLAC, and for mp3 anyway seems to play "gapless" - nice for listening to concerts without the player inserting silence between tracks.
7. Expandable memory - up to 32GB micro SDHC card. You can also load / update the card without plugging the player into the computer.
8. Micro-USB charge cable - easy to get a replacement.
9. Good battery life on mp3. I got 13 hrs on mp3 v2, and still had a little juice to spare.
10. Earphones are pretty good ear-bud types, easily upgraded - good 'phones can make a huge improvement to how this player sounds.
11. Good volume for headphone listening. This little beast easily powers decent medium sized/quality phones like my trusty Sennheiser PX100s I use at home. The player also has a region-specific volume limit. If you set the region of the player to UK/Europe (whatever the option is when you first switch on), even to my middle aged ears the volume is fine. But this is less than the player is capable of - if it sounds too quiet, like it will if you regularly play it through a car or home stereo, re-setting the Zip and changing the region to rest of world and/or using the replay gain feature with your own music can make it noticeably louder. Personally, I have kids with young ears who mainly use `phones so the EU volume limited setting is fine for us and saves our hearing.
12. Nifty additional features, like recoding from in-built mic/FM radio, and a stopwatch.
Is it a worthwhile "upgrade" if you already have a clip/clip+?
1. Yes - if you want the album art or improved radio/station display.
2. No - if all you want is better overall sound or are hooked on the enhancements free "rockbox" software gives earlier clips (ZIP isn't rockboxable, yet). (*)
Cons: Not really disadvantages, but so you know what you're getting:
1. The software/interface has some bugs so you'll need to keep an eye on SanDisk's website. [...] SanDisk have been known to add new features to the older Clip+ in this way). Nothing much to worry about though, and updating is easy.
2. RDS station name display needed a software update from the sandisk website before it worked on my Zip. Now it is is fine. (I'm in UK). This is a great feature on such a small gadet and worth buying for this alone if you're into radio. If you're player comes with the latest software the RDS should work straight off.
3. FLAC (CD-quality) noticeably hits the battery life compared to mp3. But, it also takes up several times the space and it is debatable whether or not most of us can even tell any difference between high bitrate mp3 and "lossless" FLAC. If you want near-as-dammit CD sound quality without being hammered on battery life or file size, using the player with mp3 recordings encoded by a high quality lame VBR setting should be fine (I use v2, or v0 for my favourite albums). I can't comment on iTunes' AAC playback, though the player is meant to support DRM-free AAC.
4. If you really want something to show your photos on, or play games/videos, look elsewhere (seriously, the screen is tiny and not up to iPod/walkman resolution).
5. Boring colour choice in the 8GB size. I mean it - black and grey???
6. Feels "plasticky", but this is also part of the attraction - after all, if you lose or break it, it won't cost a fortune to replace.
7. Rockboxers will have to wait. (*)
With Xmas coming, a Zip, decent set of phones, and micro-SDHC card would make an ideal musical package for almost anyone!
* EDIT 7.12.11: Since posting this, it has become possible to run "rockbox" on the zip. Rockbox isn't supported by sandisk and people who try this do it at their own risk. I won't be trying it as I'm giving this zip to my daughter as a present and don't want to risk ruining it or voiding the guarantee. There are several internet forums discussing pros and cons of "rockboxing" which are easy to find. I've no connection with either sandisk or the rockbox developers - just think that as it comes, the zip is a really tidy little gadget.
*EDIT 21.6.12 With the latest firmware, RDS now works in UK. I've changed my review as it didn't work when I first bought my Zip.