handling sucks at higher speed, with light weight. Have been doing lots of reading on the motored bicycle forums. There experiance is that a heavier bike actually works better when it has a motor. There is some best balance point somewhere. Also found out too late that it is better to have a flatter tread road tires for a nicer ride.
There's quite a few differences between the IZIP and EZIP products. You've already pointed out the most obvious one - the weight! Basically, the main reason there's such a significant price difference is that the IZIP model uses an aluminum frame and higher quality, lighter weight components vs. steel. An aluminum frame costs much more than steel - electric bike or not. Not only will the lighter frame be easier to handle, ride, lift, etc. - it will also put less stress on the motor and battery which should also extend the life and range of the IZIP. Here's an article I wrote specifically about this topic (EZIP vs. IZIP):
Not sure which IZIP model you're looking at, but the model which most closely ressembles the Wal-Mart EZIP, is the IZIP Mountain Trailz AL (or Trailz AL). Both these models cost around $700 - not $1200. You're probably referring to one of IZIP's higher end "Enlightened" series bikes. Besides an aluminum frame, these also use upgraded NiMH batteries (or Li-Ion on 2009 models) that cost significantly more than the cheaper lead acid batteries on the EZIP.