Hi everyone,
Does anyone have any experience with USB microscopes?  There seems to be a big price range, from things like this Veho for $60:
http://www.amazon.com/Veho-VMS004DELUXE-USB-Powered-Microscope/dp/B0025U0L8Y
to this ProScope for $400-$1000 depending on what "kit" you get:
http://www.bodelin.com/proscopehr/
And I'm not sure if they're worth the trouble at all.
Thanks,
Karla

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I’m not sure I can help you with your microscope question, as I still use the Mattel/Intel microscope from some years ago: http://www.intel.com/support/intelplay/qx3/  It’s hard to imagine anything newer won’t be better, but I suppose it all depends on what you’re trying to look at.

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I think this is the one our DFM guy uses: http://www.bigc.com/demo/am413fvt.php 

I have a digital microscope from these guys (http://bigc.com/products_handheld.php) which has suited my needs and has been very useful for doing stuff like communicating a rework on a PCB to a vendor as in the picture below.  They don't make the model I have anymore, but I think I paid about $100 for it.  It looks pretty similar to the model you were looking at on Amazon.  For reference, the part above R31 is an 0603 resistor, meaning it is .060" x .030. 
One of the other guys in the office just got a stereo microscope with stand with LED light ring (no shadows)  which is a nice setup--about $1500 new, he got a good deal on it used.  I haven't played with it yet.

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Interesting post. About 10 years ago I bought a toy microscope made by Intel for inspecting small plastic parts and providing feedback to my molding partners with magnified pictures. The set up worked really well. Here’s a link to the product but it doesn’t look like it’s being made anymore? http://www.amazon.com/Prime-Entertainment-QX5-Digital-Blue/dp/B000059TF3

And I’d like to buy such a scope again, but like you don’t know which one will get the job done for the best value.

Here’s another one to add to your shopping list: http://www.thinkgeek.com/gadgets/electronic/9955/

My two bits are that the lower cost USB scopes (less than $200) will only provide decent magnification up to that provided by a lens – 40x or 50x – that was the best the scope could do. That is, the 200x magnification provided by digital enhancement ended up just looking lousy and a little hokey. And like any microscope work, a lot of the quality of your image depends on lighting.

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We (Ventus Medical) have had good luck with a Dino-Lite, which looks a lot like the Veho one you linked to: http://bigc.com/products_handheld.php. We work with some small parts with tiny features and the microscope has been indispensable.
The best feature is the built-in LED lighting ring. The worst part is the software that comes with it. I could send you some sample images if you are interested - we have the AM413T.
We bought ours here: http://www.minresco.com/dinolite/dinolite.htm (Warning: retina-searing web design) For some reason the prices they quote if you email them are a lot less than those listed on the web.

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"We have a Dino-Lite, cost around $200.  Overall it works fine, but it has some delay between what is going on and what you see on the screen (approx 1-2 seconds).  This makes it unusable for real-time work like soldering, but it's nice for taking images and videos at moderate levels of magnification."

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We also have a Dino-Lite.  I haven't used it, but the other engineers here say it's pretty good.  At the MD&M show a lot of manufacturers were using that one to show off their stuff.
But it's not as good and clear as the much more expensive Keyence system we have in our lab.

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I have no idea what you are using this for, but in museum environments we've started seeing these easy to use, robust video scopes from "Microeye" out of New Zealand.
Not necessarily cheap n cheerful, but for what it's worth:
http://www.microeyeinteractive.com/discovery-users.html

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I just came across this company at a tradeshow: http://www.visioneng.us/
The scopes are about $2K but are very cool in that they are "eyepieceless" for optical viewing without having to jam your face against the scope.  Some of the models also integrate to a digital cam for viewing.
That said we have a Dino-Lite as well, and it has its uses as others have covered in previous posts.

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We bought a trinocular (binocular with a movable mirror for mounting a digital camera) a few years ago. We bought it from these guys:

http://www.amscope.com/

It was a great deal, about $500 or so with backlighting and nice glass optics. It's been an invaluable tool since. We had to make a nice adaptor for the digital camera on a lathe, but adaptors for many cameras can be found online. It's a very useful tool and very adaptable with additional eyepieces, etc. It also takes much more high res pictures than a true USB microscope and the camera can be upgraded or replaced. We use an old 4MP Canon with a flip-out screen for easy viewing. 

Of mention, we also recently added a LED ring light, which makes inspection of small parts and deep holes at least a thousand times more useful. 

If you want to do something similar but even cheaper you can just use a binocular or monocular scope and just adapt the digital camera through the eyepiece. For us it was easily worth the additional cost for the trinocular setup.