It's expensive and the quality isn't wonderful... It lacks a flash which would really hurt it with digital still shots. Mpeg4 video is nice, but I've seen similar features on cheaper cameras.
If you want a video camera, get a nice miniDV camera. If you want a digital camera, get a nice digital camera. You could get both for less than the price of that...
It has a flash, but that isn't the main issue. The problem is that the lens manufacturer is not listed anywhere, so I think it's P.O.S. No matter how good the rest of the components are, if the lens are crappy, the image will also be crappy...
Those thin ones are becomming quite popular, and will probably be the next big thing in cameras. However, for that price, you can get a much better camera. I'm pretty sure the best Casio Exilim camera isn't more than $600, and it has a higher quality CCD and has 640x480 MPEG4 video, if I remember correctly.