So far, I've been very impressed, but this may be because I had specific requirements (I'm more interested in it as a pda/web browser than a phone).
I was also pleased to be able to get it on what is (for my usage), a much better deal than advertised on the web. All the web adverts say you need a £40 a month 18-month contract (though you get the phone free). However, I got it on a £20 a month contract for a £100 up-front cost. Admittedly, I get much less call time, but as I'm not really using it as a phone I don't care.
There are some serious flaws in it that I've come across, but they don't affect me too much:
1) The battery life is rubbish. It's not as bad as I initially thought, as it turned out that the battery monitor wasn't calibrated properly, so the phone ran for longer on 0% than it had on the rest of the battery. It's still rubbish though.
2) The camera has no flash and is very poor in low light (I've not tried it in daylight).
3) The GPS doesn't seem to work very well, and the maps rely on having a data signal, so this isn't a replacement for a proper satnav.
4) It has a pitiful amount of internal storage (70MB free). This is a problem as apps can only be installed to internal storage. Fortunately, apps are in Java, and at least so far seem to be tiny.
On to the good:
The web browser works well. There are occasional problems due to resizing for the small screen, but I've successfully used most of the web sites I care about. Even the hotmail web interface works. It still has some limitations (such as no save-as or search in page).
The other apps (google mail, google maps) etc. seem to be solid too.
The UI doesn't seem to be quite as slick as the iPhone, but it's not as far off as I expected.
The keyboard is pleasant to type with (though I've got tiny hands for a man, so experiences may vary).
It really is an open application platform. There are two limitations: apps must be in Java, and there are a few limitations on the apis available. Other than that, it does seem that anything goes. I've downloaded the free sdk, compiled the test app, and stuck it on my web-site. The phone initially refused to install it, but it turns out you just need to set a check-box in the phone settings. After that, it installed and run it without trouble. If you just want to use the apps yourself, you don't even need to register.
The apps available are a bit crude (and the phone doesn't come with many), but they seem to be getting there and there are some gems. I'm particularly impressed with the SSH client. :)