I love this camera. It's by no means perfect, but it's a great compromise of form and function. I mostly use it at gigs and on holidays. It's taken me quite alot of experimentation to get good shots at gigs, but I can't imagine there are many better cameras out there for the purpose that you can fit in you jeans pocket!
Tiny; Really nice quality shots for the type of camera; Good battery life; Good video; Takes good candid shots, noone notices it, so they don't have a chance to pose; Steady shot very necessary; Build quality
Lens cover flips open quite easily; Focus struggles in low light; Steady shot isn't quite as good as they'd have you believe; 640 iso is quite grainy (but you have to use it in low light, even with steady shot)
Overall, I'd highly recommend it (or its successors). You can pretty much overcome it's limitations by making use of the limited manual settings, and the fact that you can take it anywhere without it being intrusive means you can get fun rather than contrived pictures. So the ultimate happy snapper!