I have an FD-4, though it sits in the closet since I bought an VF-160 two years ago. As I recall, the mixer section is basically independent of the recording section, other than the fact it won't do anything without a storage device (as you already stated). But otherwise, yes, it will work as a mixer, capable of sending the signal via the RCA outs or the digital out. Personaly, I found that the FD-4 was a pretty decent recorder and it worked very well. I did encounter the "No Drive" problem a few times, but usually it was because I powered up my ORB drive at the same time as the FD-4. If I powered up the drive and let it set up first, THEN start the FD-4 I rarely got the message. I stepped up the VF-160 mainly because I found working with a PC a real hassle--mainly the harddrive not capable of keeping up with the input of musical information. But, then again, my computer is about 6 years old, bought at Walmart, and with a Celeron 533 mHz. If you have a Pentium 3 or better, or the non-Intel equivalent, you should be fine. If you moved to PC recording to increase the number of tracks you can record you will find that you (probably) need a larger mixer, though, your recording program may have a digital mixer that will work well for and then the FD-4 will get you your preamps.
If you are recording all your own instruments and vocals solo you may want to consider investing in a single channel preamp. Most will take mic/line/instrument level inputs and send a line out signal that you can then send to your computer's soundcard. Many on this BBS love the ART MP series. They sound good and cost less than $100, though ART does have some more expensive ones as well. I have one and I like it well enough.
The other thing that you need to be aware of is that not all soundcards are equal. And if yours came with your computer, it is probably not what you really want. On my computer I have a Midiman digital card. It basically accepts a digital signal and sends a digital signal. It does not accept analog so you have to have a mixer with digital outs--and you do with the FD-4. This allows the computer to not have to do any signal converting and should make it work a bit faster. I got my card new for $50, if I remember right. More money, more capability. Still. Something to keep in mind. For $200-300 there are a number of recording sound cards out there that will allow you to bypass an external mixer. Just look on Musicians' friend, American Music Supply, Zzounds, etc. and see what you might want to look for in the future. Remeber, when recording with stand alone units or computers, your recording device is far from the last piece of equipment you will need. So your computer setup, just as with your FD-4, will start making you look to see what else you need.
Well, that was probalby more than what you needed to know, but I hope I helped. Let me know if there is more help that I can give.
Peace, Jim