I've been using my Zoom H4n for well over a year now, to replace my DAT machines (yes!) - and in that time I've done a good many different recordings with it, so I hope my experience is useful for you.
I originally got one of these because I wanted to capture musical ideas on the fly. When you wish to note down a musical idea, it's a lot easier to just fire this thing up than to find your microphones, connect them to your sound card, then to your computer, etc, etc. So straight away, this is useful just because it's available and very quick to set up.
Recording-wise I've put it through its paces and made some amazing recordings - of our choir in a large concert hall, of a Colombian harpist at a concert, of my own performances to sync to video, all using the built-in microphones, plus some experimental multitrack and stereo recordings using external mics. In all of these cases, this thing was flawless.
The XLR sockets can provide phantom power. The one note of caution I'd offer is that you won't get the quality with external mics that you get with a really good outboard soundcard. With the right mics it can sound very good indeed but (and I'm being ultra-critical here) not if you are really trying to get the last ounce of quality or signal-to-noise ratio out of good mics and instruments with wide dynamic ranges (for example, singing bowls or other more unusual instruments). I tried it with a range of Rode, AKG, Neumann and Sennheiser mics and came to the conclusion that if you're trying to do the best recording possible, you will already know that a recorder at this price level really won't cut it. However, you can still experiment with 4-channel simultaneous recording and that can be useful if you want to try out (for example) surround-sound mic positions on location in advance of using professional equipment. The only other negative for semi-pro use is that the screw thread is not a microphone one, it's a camera tripod thread, although they supply a microphone adaptor which frankly, is a bit clumsy.
Where it really shines is in being able to be up and running in seconds, and the built-in mics are very good indeed in terms of stereo positioning, signal-to-noise ratio and frequency response. It doesn't much like handling and wind - both of these will be more than usually evident on your recording. My tip for anyone buying one (to avoid handling noise) is to get one of those little bendy camera tripods and stick it on that. The battery life (stamina mode - limiting you to 16 bit stereo at 44.1 / 48kHz) is quoted as 11 hours - which wouldn't at all surprise me. If you go for 4-channel recording or a quicker startup, that will use up batteries more quickly, but you'll still get several hours out of a set. Amazing really.
My summary - good points are:
Great for experimenting with microphone positions in advance of more "serious" location recording setups
Excellent to switch on and quickly capture stuff on the fly - for example, musical ideas
Easy transfer to PC - just plug and go
Great for recording audio to sync with a video camera
Internal mics are excellent - low noise, good stereo positioning and wide frequency response
Battery life is amazing
The sheer convenience compared with multiple bits of audio equipment (mics / cables / soundcard etc)
Not so good for:
Really critical high-quality recording using external mics (I don't think it handles external mics as well as I'd hoped it would)
Really demanding recording scenarios, for example where instruments have extremely wide dynamic ranges
Summary:
Fantastic little(ish) stereo recorder which works really well and really reliably - and gives you options to experiment with external mics and multitrack recording. For those times where you want to get really good results, unobtrusively and quickly, this thing can't really be beaten.