Resumo: I tried to make a decision between Sony W1 and Canon Powershot S500. They both inherited excellent CCD's from Sony V1 and Canon G5, so they are comparable for the most of the features. After comparing reviews and spec of these 2 cameras I decided to go with Sony W1. Larger LCD - MATTERS!!! Plus, I think, Sony W1 has better optics and pictures are more uniformed, brighter. Canon S500 images are noticeably losing sharpness in the corners (judging by test images at www.steves-digicams.com), and smallish 1.5 LCD doesn't help either.
Geezz...! How to make right decision..? :) Well, everyone who is selecting digital camera should realize first what this camera will be used for and what do you want to do with hundreds of images.
I needed camera for taking a lots of images from travel and other nice occasions to create a slideshows and view/display them on the computer monitor ( maybe in future - large screen HDTV ). For this use - camera provides Very Good image quality. I'm not using term "Excellent", because only SLR's Nikon D-70 or Canon Digital Rebel can get you Excellent images (but thy will set you back ~$1300). To me, Sony's W1 5 MPix, simplified features and large LCD, is just right. Of course, it is impossible to build a perfect camera in all aspects, so some things are not perfectly implemented here as well.
I don't like flimsy door for Memstick compartment. User should be careful when inserting or removing memory and remember ALWAYS to close this door right away! If you leave this door open and put it down carelessly on the table, or not so even surfaces - there is great chance that you will break it off. Even though this door serves just as a dust cover for Video out plug, DC-in and Memory Stick slot, and camera will not be broken beyond repair, it is better to be careful and have it in one piece.
W1 optics are Carl Zeiss, but they are a bit inferior to it's older brother V1. Anyway, they doing very good job.
Camera feels a little heavy for it's size. It was strange at first, but I like it now. This actually helps to hold it steady while taking shots.
All Auto presets doing pretty good job. But "Manual" mode allows some freedom to experiment and if you know what you are doing - to get very nice results. Anyone can use this camera.
Of course, like with any digital camera, you will need extra batteries and larger memory card. I wonder, why most of the manufacturers still selling digital cameras with small Mem cards (32 MB) - they are not practical at all. Why not lower price a little and let buyers decide themselves size of the card? (I know that Nikon "got it" and is selling Nikon D-70 without any CF cards). I will get 1 GB MemStick Pro II - to have plenty of room for pictures and chance to take 30 Fps VX movie (1 GB will fit 10+ min video!). VX video quality on regular Memory Stick is just average, but VX should be good.
I use only a 3x optical zoom, because Digital Zoom is not good - distorts image significantly. It makes your 5 Mpix camera image at max resolution look like 1Mp camera or worse... I guess, it is true for digital zoom systems of all manufacturers.
Software on the provided CD is a garbage (literally!). Only useful thing on this disk is an USB driver. But if you have Windows XP (and most people already do) you will not need it. USB driver is needed only for computers with Win98/ME/2000. To editing and resizing images I'm using Ulead PhotoImpact and/or Adobe PhotoshopElements.
It is great to have a regular (not electronic) viewfinder. You can take pictures with LCD off.
I use rechargeable batteries (they last much longer) but even if I run out of them, I think it will be no problem to find regular batteries (unless you are taking pictures far from civilization). Flash of any digital camera "eats" any batteries mercilessly! W1 is no exception.
Build quality is very good. This camera is definitely was designed to last long! Again, image quality is Very Good and I highly recommend it! Among the compact 5 MPix cameras, Sony W1 and Canon Powershot S500 are the best values for the money. Just pick the one you like most.
PS: it was interesting to find that author of the previous review also was comparing W1 and S500...