We have one for my 3 year old. I think it is quite good for that age. The scree picture quality is very poor and I assume that is what everyone is talking about. We have not tried to download any to the computer yet as he is too young to take anything proper. But I assume it would look fine on the computer. My older son (6 years old) has this one www.amazon.com/Vcam-Digital-Video-Camera-Colors/dp/B0009S4UPO which is excellent. It takes video as well as stills and is tiny. He carries it everywhere. However, it is not suitable for under 5's really as it is not sturdy like the fisher price one. It also does not have a flash so less goof for indoor stills.
I think you have to decide what y ou want to get out of the camera. If durability is a must for a toddler, then get the fisher price one. But if the child is older, a proper digital camera may be better.