I've owned it for a year - excellent compact video camera
I've been using this camera now for over a year to record family vacations and events. I have greatly enjoyed the camera and feel that it was well worth the purchase price.
Put the camera in proper context before evaluating - it is not a professional video camera - it is a small, high quality camera that I can slip into the front pocket of my jeans or my coat pocket and carry with me wherever I go. The all metal construction makes it feel like the high quality device that it is - no cheap plastic construction. It turns on almost instantly and is ready to record family moments.
If you don't like fooling around with AVCHD, then simply place the camera in Standard Quality mode - the resulting output is still excellent in both daylight and dark or indoor situations. When I get home, I simply remove my 4 GB or 8GB memory stick and place it in a card reader to save on the PC.
Don't get all hung up on the difficulties with the AVCHD (high definition) format. If you don't have the computing power or software now, just use SD until you are ready. Many people fumble with HD clips and then wind up downgrading them to SD to fit them on a DVD. (BTW, you can record about 20 min of HD on a standard DVD and play in a Blu Ray player. The memory stick cards play natively in HD on my PS3.)

To sum it up, this camera has allowed me to record MANY more family moments than any other video camera I have owned over the last 15 years. It is so easy to take it with me, conceal it in a pocket and not look like a tourist, that I take use it much more than I would with a regular camera. The high quality construction and the high definition video are simply icing on the cake.
P.S. - for night shots, such as recording half time performance at high school footbal games, I bring along a monopod - it greatly helps in stabilizing highly zoomed shots.

Incredible
The minute I saw the camera on the Sony web pages, I knew I had to have
one. I am a long time fan of Sony's ability to turn out these small,
watch like products, back to the original Sony walkman, a player for
standard cassette tapes so thin and small that the player itself would fit
into the same box as the tapes did.

The HDR-TG1 is another Sony hit clean out of the park. The complaints
about it sound like complaints that the Apollo moon rocket could have
gone farther. This camera unites everything about where consumer video
cameras are going in the future, pocket size, high definition, flash
memory, and features fit and function.

Some of the complaints about it might have been solved simply with time.
The video format it uses is now widely supported, and I got a new
version of Pinnacle Studio that supported the format just fine (but
beware, if your video card does not have enough memory, Studio just
fails to display it without telling you why).

I choose the HDR-TG1 because the newer version simply added GPS and
a built in memory. I just added a 16gb card to get the same capacity for
far less, and I guess I will have to miss being able to navigate via
my pocket camera. The price difference is breathtaking.

I tried a shot in low light, and it has noise like all other cameras.
The photo still shot capability is adequate, but I carry a 12 megapixel
Sony along with this camera, and am happier with those shots.

One warning, the software that comes with it is fairly useless. The
"motion browser" was annoying with still images due to its need to
waste tons of computer time accomplishing nothing that I can figgure
out. With movies, it becomes downright obnoxious, taking HUGE amounts
of time. When you try to cancel it, it warns you that you are going to
lose video, a claim I will have to test at some point. Sony, allow us
to turn this useless option OFF.

The other gripe is that the export to .avi or .mpeg mode is thoroughly
USELESS. All it does is turn any motion shots into nightmare comb
(interlace) artifact displays. Pinnacle Studio managed to filter this
out just fine, and had far more output options that the Sony freeby
application. Sony, if you paid people for this software work, ya got
taken.

Otherwise, the Sony app is quite nice. It catalogs the movies and photos
together well, and thus I was impressed at how it integrates the shots
from my movie and still cameras (both Sony) well. The only other issue
was that on one machine that already had the still camera version the
software with Windows XP, it canceled the installation with an
incomprehensible message about "use the original installer" without
accomplishing anything. It took wiping the entire application and
starting over to fix it. At the risk of being repetitive, Sony, you need
to get better software programmers for your PC applications.

That's it. Buy this camera before they discontinue it. Its a deal.

Sony HDR TG1 HD1080 camcorder
So far the camera has been awesome. Its very portable and the battery life has been excellent. I have yet to record continuously to test the full battery life. I have recorded for 5-10min blocks but have done so for weeks and the battery is fully charged. Very weird. I have not transferred any video as of yet to see quality so I cannot comment. The picture quality is so so but I have not played with the settings to get the yellow out or reduce it. My main reason for getting this camera is the compactness. What good is a good quality film camera if you don't have it when you need it because it is too bulky.

Awsome Small 1080p HD Camcorder
This is the HD camcorder I've been waiting for. Great Color and Detail are what you get with this take anywhere camcorder from Sony! I would have bought it sooner, but decided to wait till pri ces dropped. My first recording was shot on my Disney Bday trip. Watching it on my 50" plasma is like looking through a window into the past! Sony does have a newer version, the TG5, but the only difference is a GPS Tracker. Which I dont really want or need, save yourself about 0 to 0 and buy the TG1 before they run out!

Only had this a week, but am loving it so far!
Had this a week, and have nearly filled the included 4gb memory stick with test footage, shot in all sorts of situations.

I've seen complaints that it doesn't do well in low light. Haven't found that to be a problem yet, even shooting in a dim hallway with half the light fixtures out.

Also have seen that the still pictures don't come out well. The ones I've shot seem perfectly fine to me, no complaints there either, they're coming out nice and sharp.

And so far as the AVCHD footage issues, well, given that I've got a 6+ year old Sony Vaio that has been upgraded as much as it can handle, I sort of expected my PC to choke on the HD footage. And it did. Would play the first frame, and then would get stuck there while the audio played on. Solution? Well, there were several: convert the footage into something that my PC CAN handle, burn it directly to DVD without trying to edit it, or just shoot in SD mode, which my PC could handle just fine. Most likely I'll just burn the footage directly to DVD most times and not worry about it.

Complaints? That I can't use the included software to burn an HD disc that will play on my standalone player. I've got a Toshiba HD player, and I'm fairly certain that the included software will only burn a disc that will play back on a Blu-Ray player, which I don't have, but I'm sure I'll get eventually, so not a big deal. Plus I have other software that will burn HD footage to an HD DVD on standard DVD-R discs that IS compatible with my Toshiba, so that should take care of the problem until then.

Also that it treats HD and SD footage completely separately; while the camera is in HD mode, it won't play back SD footage, and vice versa. Will probably shoot mostly in HD anyway, so also not a big deal.

It SAYS that I can hook up the camera via USB cable and record the HD footage to a DVR, but I tried that tonight, and it didn't seem to work. It recognized the camera, and would play the stills, but didn't find the videos. I still have more manual to read, so I'm not worrying about that too much yet either, I'm fairly sure that the problem is just a user error not a hardware error. :)

All in all, very happy with this little camcorder so far. It's got all the features I wanted (some sort of optical zoom, rotating LCD display, anti-shake feature, in a "flip" body type) packed into a very small unit.