I tried it one more time on a different computer to install the Flip driver, and it worked! Turns out I had to install the regular driver first, and then go into device manager and right click on it and click update drivers. Then connect the Gnd and reset on the Arduino like you said and continue with the driver installation. Point the the install wizard to the \Atmel\Flip 3.4.7\usb\atmel_usb_dfu.inf file, and it should install the driver.
So what do I do now? How do I see in Flip what firmware I'm running?