Well firstly I bought this camera when it first came out and I paid a lot more for it and I was happy to pay that because of the features, so for this price you are getting a lot of kit for your money and I'd say snap it up!
The camera body is black (unlike the G2's that come in red and blue) it is a rubberised body that is nice to the touch. The lay out of the camera controls are well thought out and are just where you want them. For beginners going up from a compact just press the dedicated AI button and all the hard work is done for you, just point and shoot. But do start experimenting with the different settings it isn't difficult and the manual is the right size to pop in the bottom of your camera bag until you get used to the settings. The different colour settings are great as well, no need for expensive sepia filters etc. For the more experienced shooters the settings are the standard MAPS, an easy to use dial rotates your f-stops and shutter speed. Shutter speed does have B (bulb), but it is only four minutes, which is a shame, but not important to everyone. F-stop depends on your lens and the kit lens is great to get you started but you will soon outgrow it as you develop. It has quite a small range but the pictures are good enough nice and sharp. The main advantage of this range of camera's is the size, not much bigger than a point and shoot. I take this camera out with me walking all day along with my rucksack and it is fine. If you really want a camera that can slip in your pocket then I'd advise investing in the 20mm pancake lens as well. That lens is tiny and the pictures are amazing.
There is no touch swivel screen and independent video recording button if this is your thing then the G2 is the one for you. As far as I could tell from reviews in camera magazines and Which? these were the main differences ( oh and about £150)