This is a camcorder for the digital age. Tiny, multi-functional, and flexible. No ancient-technology magnetic tape. As with any product on the leading edge, there are many shortcomings.
Let's dispense with the obvious. This device is all about compact go-anywhere flexibility and ease. For best image quality, a dedicated mini-DV camcorder and dedicated digital still camera is the only way to go. In fact, buying a separate camcorder and still camera may likely be less expensive than the Sanyo C6 while resulting in superior quality.
Overall image quality is best described as "OK". The poor lens zoom and aperture is more befitting a $100 digital camera than a $400 device. The flash is weak and will not light many scenes that any other still camera would light. In addition, since the flash is not offset in any way from the lens, red-eye is virtually guaranteed at any range. This is not a problem with digital touch-up being common practice, but plan on touching up more often. Low light conditions drag down image quality dramatically in video mode. Virtually any digital camcorder at any price will outperform this Sanyo in video mode in any situation, but a little day light goes a long way towards improving video quality with the Xacti C6. Also, to be clear, the video quality is still superior to anything seen in the best of analog camcorders.
For all these negatives, the convenience can be truly revolutionary. One can wear the tiny VPC-C6 around the neck all day. This causes an amazing change in attitude towards video. Since the Sanyo is so compact, no one would think twice about bringing it along on any minor travel. Being freed from the chore of "packing up" a camcorder means a corresponding willingness to bring the Sanyo on so many more occasions, such as a visit to the park instead of just weddings and birthday parties. And whereas a mini-DV camcorder requires one hour to transfer one hour's worth of video to your computer, the Sanyo transfers video as fast as the SD card and USB 2.0 interface will allow. That means five minutes or less to transfer one hour's worth of video to a computer. This ease increases willingess to create video and share video. No more procrastination over dragging out the camcorder wiring and the manual task of initiating video transfer to a computer. With the Sanyo, just place the camera in the docking station and pictures and video files are available just like files on a USB flash drive. It is difficult to overestate the significance of this convenience. Video becomes an everyday pleasure, if one so wishes, rather than a special occasion chore. If one values this convenience over absolute image quality, this is the product to own.
This is a leading edge product. To get the most of this product, I highly recommend doing the following: 1) Sanyo has provided an updated firmware on their website. This fixes a fatal flaw in the audio processing that some people have noted as excessive distortion - this update makes audio quality competitive with other camcorders. In addition, this firmware update adds compatability with 4gb SD cards (the limit is 2gb without the update). Kudos to Sanyo for the continuing support. (Note that the instructions are a littled distorted in the translation - what they meant to write is that you need to push the SET button to the LEFT to enter the firmware update screen.) 2) The video is in MP4 format and is playable only with Quicktime. For Windows users, this limits video editing to the included programs or Quicktime-specific programs. There is an easy solution. First, download the Divx codec (a freeware commercial product) or Xvid codec (a free open source product - my preference) or ffdshow (a free open source product) - use your search engine of choice to find these. Second, download a utility called "MP4CAM2AVI" (a free open source software found easily with your search engine of choice). With these two programs, the video becomes compatable with any Windows program, including just about any media player (such as Windows Media Player) and any video editing tool (such as Windows Movie Maker).
I look forward to seeing how this market segment evolves. The freedom from bulk and digital tedium is addicting and I am sure the image quality will continue to improve. For now, I am happy capturing the memories that would have otherwise been lost had I continued to own a conventional bulky tape-based camcorder.