I've had the Olympus VR-340 for just over a month now, and used it quite heavily, as I was traveling overseas for 4 weeks of that time. Here are my thoughts, as a regular guy who likes to take good pictures, but is far from a camera buff.
The VR-340 is on the big end of point-and-shoot cameras, at least as far as I could tell. It doesn't look that different until you hold another camera up to it though, at which point you can really see the difference. It seems to me that its thickness is the biggest difference. Still fits in a pocket great though, so don't worry about that. It also fits perfectly into the Lowepro Apex 20 AW -Black, if you're looking for a case.
This is where the camera's extra size really pays off. I used a camera with 5x optical zoom for years, and that still seems to be the general standard. 10x is a HUGE difference. Well worth the extra money, even if you're just getting the camera for vacation. You'll be amazed how often you want to take a picture of something that's too far away for a camera with 5x zoom to pull it off without the picture getting grainy. I also really like the trigger zoom system on this camera (the zoom control is a little trigger surrounding the shutter button, so you just use the same finger as you use to take the picture itself). Once in a while, the trigger gets caught a bit on the edge of my pocket when I pull the camera out, but I don't think it's bad enough to break the trigger. My previous camera was an Olympus and had the same system, and I slid it in and out of my pocket for 4 years with no problems.
I'm pretty pleased with the picture quality. 16 megapixels is a ridiculous amount. I honestly can't imagine the average person could tell the difference between 16 and 8 or something on normal pictures. That said, if you can have more, why not? It at least opens up the option of blowing your photos up larger. My only real complaint about this camera is that I've had some problems taking pictures without some blurring. I've tried fooling with the shutter speed, flash, etc., and the problem occurs very rarely. But when it does, it's pretty annoying (hence 4 stars instead of 5). It's not like I'm jerking the camera all over the place when I take the photos either. When the problem occurs, it occurs even if I prop my elbows on a table to keep my hands steady. The only shaking would be from my heartbeat, which is fairly tough to control.... Maybe there's a way to fix the problem with the settings - I just haven't found it yet. With that caveat, I've been very pleased with the picture quality.
I'm a big fan of the features on the camera, though I really don't use them all. Very easy to adjust the ISO, white balance, flash, etc. if you want to, or just let the camera figure out the scene and make the necessary adjustments for you. I found the camera did a very good job generally of identifying the type of photo being taken and adjusting the settings accordingly. I tried the "Beauty" setting, where you can allegedly fix portrait photos in the camera itself, but didn't really find it very helpful. The "Scenes" are great though - the "Landscape" one enhances blues and greens, "Candlelight" enhances yellows & oranges, "Nighttime Landscape" keeps the shutter open a bit longer to gather more light, etc. Big fan of those. I also really like the continuous/sequential setting. If you hold down the shutter on these settings, you can take a TON of sequential photos. The camera takes another photo every 0.5-1 second, depending on your SD card and how many megapixels you want each picture to be. I rigged it up with a rubberband and a small rubber bumper (like you stick to the inside of cabinets to prevent them from banging when you close them), left it on a stand, and took sequential photos of myself and my girlfriend, too. Pretty easy to do.
The VR-340 says it records movies in 720p. That seems about right. It's not as good as a dedicated video camera, so you shouldn't buy this for its video-recording capabilities. That said, the movies it does record are quite good for a point-and-shoot camera. The image is a bit jerky if you move the camera around very much while you record, but it's pretty good if you can hold it still. You can also choose whether to record sound with the video or not. Basically, I think this is an excellent feature on the camera, and it's more than enough for a tourist who wants to record the occasional video on vacation, but takes mostly still photos.
I'm pleased with the VR-340. It does everything I need it to and more. The videos and photos it takes are generally excellent, with the caveats that I struggled on occasion to get the shutter speed fast enough to take a non-blurry photo and the videos get a bit jerky if you move the camera around too much or too quickly. I would definitely buy this camera again. Shop around a bit. I think you'll see that every other camera-maker charges significantly more for a camera with this array of features. I don't pretend to know enough about cameras and photography to critique the finer points of the photo quality or anything, but for a regular person looking for a solid camera you can stick in your pocket, this is great.