Sorry I really can't off you any more insight since I haven't had the opportunity to use a DG1000z.
Would I still swap my DG4000 series for the DG1000z? Probably, I still find the lack of memory depth highly irritating on the DG4000, it's very limiting if you want to play any reasonable length of waveform that has a reasonable bandwidth.
You're right that the manual has not been written very well, not that surprising really. On page 2-17 which I think is what you're referring to, it talks about editing 16kpts, then talks about loading 8/16Mpts from a PC. While it's far for clear I would suggest that you can only edit up to 16kpts on the actual device itself. Anything larger than that and you need to use a PC, which I reckon is totally reasonable. I've pretty much found editing waveforms on them to be a fairly useless exercise anyway, you're almost always better off generating the waveform on the PC first then uploading.