The Xperia X10 Mini is a good phone. SE has simplified the UI quite extensively, to ensure it is usable on the small screen. I bought this for my Mom who isn't tech-savvy at all, but she loved it. A regular smartphone would have been overkill for her, but this was much simplified and turned out to be a good fit.
The phone has all the essential features, and they work very well. Camera is good, takes decent quality pictures as well as videos. The sound is good too, especially from the phone's speaker which often on phones isn't of good quality. The phone has an FM radio as well, which is a plus.
The phone does have some cons. A very visible one is that you can not change its theme. You are stuck with the white text on blue background, which isn't the most comfortable combination on the eyes. SE should have chosen a more contrasting combination since the theme was not changeable.
The (soft) keyboard is not QWERTY, as it would be impossible to type on the small screen with it. Unless you are a heavy user of texting or sending emails, it should not be a problem.
SE has recently announced that Xperia X10 Mini will not be receiving any more Android OS updates. The latest it will have is Android 2.1.
The package comes with 2 back covers - white and pink. It had a hands-free which also acts as an FM antenna. SE has moved away from their proprietary chargers, and this phone has a micro-USB slot and comes with a micro-USB to USB cable. The same cable can be used with the supplied mains adaptor for charging or to connect to a computer. It also contained screen protector, but was missing a pouch for the phone. I feel all touch screen phones should include a pouch by default in the standard package.
Overall a good purchase, if you are fine with the screen size and like a simplified interface.