As a photo enthusiast with a number of photo workshops/classes and countless books on photography theory from landscape to portrait photography so I'm a very hard person to please when it comes to digital cameras. First I would like to mention that digital cameras are still a long way from matching quality of the better film cameras using 35mm slide film and no where near the potential quality of medium and large format cameras, so you need to take that into account and consider what you will be using it for. When I purchased this camera in June 2002 it was the cutting edge CyberShot. I immediately dumped the 16mb memory stick and picked up the largest available (and still to this day) 128mb Memory Stick as well as a couple extra lithium batteries. The great part is one of the batteries lasts right about as long as it takes to fill up a 128mb card!
The pictures are outstanding for a digital camera, the other thing that is really cool about it is you can capture mpeg format video with sound. Dont toss your video camera yet though, its dark light performance is hideous and resolution is not even close to a digital or tape video camera, but it is a neat feature when used under the right circumstances.
My biggest grip is Sony never came out with Memory Sticks larger than 128mb and doesn't appear to ever support it. They've produced a smaller MemoryStick version thats half the size but has an adapter to make it work but still none of larger capacity. I recently read on their web site that they are comming out with a total new format that isnt going to be compatable with any current MemoryStick device but will have capacities in the future exceeding 1 gigabyte.
At max resolution 2200x something, you can get 65 still pictures on a 128mb card. The pictures are in fact so good that you can stand 30 feet away from a soup can and snap a shot of the label, view the picture and zoom in to the point where you can read the ingredients. You can also set it down to 640x480 and get like 1500 pictures on to that same 128mb card so theres a lot of flexability depending on your needs.
Its a great camera if you need something compact and good enough to take pictures of things in every day life for instant digital gratification. If you dont plan to blow up prints the size of a poster you will have no problems with the resolution and find that the max setting is many times too much for your standard birthday party or trip to San Diego.