Ok, after using it quite a bit and playing around with some of the functionality, I have to say that I'm impressed.
Pros:
1) excellent video w/ audio and the video is very good quality
2) ability to record audio notes
3) super small
4) cradle so there is no more removing of batteries to charge the camera and transfer to the computer is handled through the cradle as well
5) easy to navigate menu
6) TONS of options and ways to manipulate the shot (I haven't even touched half of the camera modes... there has to be close to 20 or so, maybe more)
7) super bright flash, plus red eye reduction, and what I call the "anti-wobble" feature (tries to fix hand-shaking issues)
Cons:
1) only a 5MP, and my dad said he just bought a 7MP Nikon for about the same price
2) LCD isn't crystal clear when just viewing live action (when lining up a shot or whatever) - however, the pics and video look good during replay
I don't really ever get into all the super details about ISO and all that crap, so I can't give you the pros and cons of that, but if you want a full critique, go here:
http://www.steves-digicams.com/2005_reviews/ex-s500.html