I bought this pen cam yesterday and though the documentation states that its built-in USB drive would be recognized in XP without any extra drivers, it was not working in my desktop XP after I charged the pen's battery for over an hour. More specifically, it was recpgnized as a new hardware device and the XP reported that a driver for it was found and installed, but when I looked at the Properties of the newly installed drive, it would show 0 size and no file structure. It could also not be formatted.
After this I tried to see if it would be recognized on my Win7 laptop and to my surprise, it was and I could also see its FAT directory structure with over 3.5 GB. After this I quickly recorded a test video that I downloaded to my laptop and it looked and played well. So, unless you plan to use this PenCam on a Windows XP PC, the gadget works surprisingly well with Windows 7 and in my opinion it is worth its modest price. I wish though that the attached CD would also include some driver that would make it work with XP systems. Because of this shortcoming I can only give it 4 stars instead of the intended 5.
By the way, I bought this PenCam at Fry's, not at Amazon, but I don't think that makes any difference in the product itself.