I recently purchased a Sony NEX-3 camera, which puts an APS-C sensor (the kind low and midrange DSLRs use) in a much smaller form factor. They do this by removing the complicated mirrors that allow DSLR users to look through the lens as they are framing the photo. To me, the DSLR mechanism is just too old-school; I don't want to see what the lens sees, I want to see what the SENSOR sees. I would have preferred an electronic viewfinder over the ubiquitous swiveling LCD screen, but as a space saving measure I guess that makes some sense. The LCD is very high resolution and quality, at any rate.
They also make the camera smaller by creating a brand new lens system, what Sony calls the "E" mount. It seems to work well; the NEX-3 is even smaller than comparable Four-Thirds cameras, whereas since the APS-C sensor is larger than the Four-Thirds sensor, physics would seem to require a larger camera and lens to handle it! Well done Sony!
For me the important things were:
1) new and exciting form factor, which they did
2) very high ISO, which they also did; I defy you to find another camera under $1000 (with a lens) that can make usable pictures at 12800 ISO!
The user interface is practically guaranteed to offend DSLR users ;) This is exemplified by the review in dpreview. The review is typically thorough, but they conclude at the end that the user interface "falls down", evidently because it takes a few button presses and dial rotations to do things like change the ISO setting. I think, though, that they pretty much review the camera from a DSLR user's perspective, whereas I think they should have done it from the perspective of the user that is moving up from a point and shoot camera (like me); I like the interface; if you are not all that familiar with the arcane incantations involved in taking good photos with a high-end camera the interface makes a lot of sense; it's like a Mac camera versus a UNIX camera ;)
However, I agree whole-heartedly that it makes little sense to have a camera that can take good pictures at down to at least 3200/6400 ISO and then not allow these ISO settings to be used in full auto mode. That definitely needs a fix, Sony!