Awesome little camera
I bought this camera primarily for its ruggedness and underwater capability. Did extensive research and decided this camera offered the best combination of image quality, features, and design out of all the "rugged" cameras I looked at. I already own a Nikon D40 DSLR and several lenses for the times when I need serious image quality and flexibility, but if I'm going to trade off capability for portability with a compact camera, it would be nice to get some new capabilities in exchange, and this camera delivers.
Image quality is decent for a compact. Not anywhere as good as a DSLR, but certainly better than a lot of Sony and Olympus models I looked at, which smudge every last ounce of fine detail into what looks like a water painting. I usually shoot mine at the 5MP setting to save on memory capacity, and I don't see much difference between this and the 12MP resolution. There's just no way this tiny lens and sensor will capture 12MP worth of detail, not even close to my 6MP DSLR. The bonus of this option is the extended zoom feature, which uses only the center portion of the sensor, thus allowing me to zoom in closer without degradation in image quality, unlike regular digital zoom.
Some other notable features I like:
-relatively fast auto-focus for a compact
-usable zoom range, starting at a moderately wide 28mm equivalent focal length
-optical image stabilization
-easy exposure compensation
-"intelligent exposure" to tame the highlights and shadows in high contrast scenes
-macro shooting
-adjustable white balance (no fluorescent preset, but can set custom WB using a white/gray card)
-variety of scene modes, including long exposure and lower-rez high speed burst (about 7fps)
-dedicated button for HD video recording with optical zooming and image stabilization
-nice-looking design, doesn't resemble a plastic toy camera
The waterproof capability seems to hold up just fine. I submerged the camera in my sink, and saw no problems. Also took it on a wet and wild boat ride where it got splashed with salt water as I was filming video, then washed it off under a faucet when I got home, and the camera performed without a hiccup.
Overall, I'm fairly happy with this camera, and the price is very reasonable for the capabilities it offers. In fact, it spoiled me, and I would not buy any other compact camera unless it offered at least the same kind of ruggedness and features.