I should preface this by saying that I used to be a semi-professional news photographer, so I tend to expect more from a camera than the average consumer might. I have a DSLR that I use for anything serious, but I need to have a pocket camera for those occasions where the DSLR is overkill, but the cell phone won't cut it.
Bought this to replace my Pentax Optio S6. I had purchased an Optio S3 for my folks, and was impressed by the quality of the pics that such a tiny little camera could kick out. But the S6 never seemed to work quite as well as that S3-- the autofocus always seemed to fail just enough that the pic looked ok on the camera screen, but was bad when I downloaded it to the PC. I was also never that impressed with the flash for indoor pictures.
So when making this purchase, I basically wanted to correct those three issues-- better autofocus, better overall image quality, and better indoor/flash images.
So far, this camera is winning on all three counts. The autofocus kicks in in about half the time as the S6, and it has a focus assist light that I don't remember noticing on the Optio. In low-light situations, I'm getting reliable focus when zooming in on objects that are 10 feet away. The image stabilization seems to work very well, and it's much more obvious if a picture is out of focus or blurry than it was with the S6.
The flash definitely appears to be a lot more powerful, but until I use it to take pictures in a bar at night, I can't give the final word on that.
Likewise, the pictures I've taken so far appear to be pretty good-- the camera compensated for twilight conditions well on full-auto mode, although things were a bit oversaturated. The auto ISO adjustment kicked out relatively noise-free pictures even at 800, and 400 looked as good as anything I've gotten out of a point and shoot before. The real test here will be taking some outdoor pics in full daylight.
One feature worth pointing out, if you're more accustomed to SLRs-- you have a dedicated exposure compensation button on the back of the camera, allowing you to make some manual adjustments to the image. The results are shown on the display in real time, so I was able to have the camera correctly focus on the ground, but expose for the sky. From what I've seen, however, you don't have the ability to adjust shutter, f-stop, or focus manually, although you can lock the camera to a specifc ISO.
The video apppears to be acceptable-- I was pleasantly surprised to see that the image stabilization worked with the video, although the final result was nowhere near as sharp as I would normally expect out of HDTV resolutions. This may have been due to lighting conditions.
Overall, this is a solid unit that's only a little wider than the diminutive Optio S series, while being slightly less deep. I'm impressed by what I've seen so far-- this definitely seems like the pocket camera that I needed. Small enough to not have an excuse to leave behind, powerful enough to take good shots, and at a price that doesn't break the budget.