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(Updated 11/26/2012) I now have GoPro Hero3 Black Edition. This review changes a bit. Although Sony is pretty good, if you can afford $399 action cam, I would go with Hero3 Black Edition. Otherwise continue with my review.
If you are OK with the following limitations of the Sony Action Cam, this little Sony Cam is absolutely fantastic. Otherwise, I would go with GoPro Hero 2 or Hero 3 Silver Edition.
1. CANNOT RECORD SOUND in 60/120FPS modes. Not that I value sound from any Action Cams inside a case, but no sound can be a deal breaker for some.
2. Underwater footage is much worse than GoPro Hero2 in terms of color (Mainly Sony auto white balance does not work underwater). The case of the Sony Action Cam also has a curve lens, so it cannot focus underwater. Sony will release the door pack that includes the flat lens dive door.
3. Severe Lens flare. Some lens flare can be a good visual effect. I am OK with it if the flare is not too much, but Sony cam often washes out some colors under certain conditions.
I do not record any action cameras in 1080P/30FPS mode since CMOS jello effects can be very pronounced in fast action scenes. So I record most clips in 720P 60FPS. The problem is that Sony records 60/120FPS footage without sound and output videos as 30FPS. I do not mind the output frame rate, but the sound should be there.
Sony underwater AWB does not function properly yet. I do not believe Sony adjusted the camera for underwater usage. The color is very strange. Too green, too blue, and a bit noisy.
If you do not mind these issues, then this is the camera to get because
1. The Zeiss Lens is absolutely the sharpest among all action cams out in the market right now
2. The SteadyShot is just unbelievable. I was not a big fan of an electronic image stabilization, but this one really works!
3. Colors produced by the image processor is very natural. The tonal curve is flat, so it is much easier to post process.
4. The lens is wider than GoPro Hero2 or GoPro Hero3 Silver Edition and much less fish eye (Less distortion)
5. Low light performance is better than GoPro Hero2 or GoPro Hero3 Silver Edition.
6. The Noise Reduction works really well.
7. Very smooth motion.
8. Lower price.
9. The case is high quality.
10. The case has a standard tripod thread.
11. The case latch is pretty solid. It should not pop open like the GoPro Hero2 one. Hero3 case is very solid BTW.
Other minor issues that you may want to know (could be major issues for some)
1. It cannot stand on its own without the case. The bottom of the camera is round, so it falls down on its side.
2. I wish Sony added two more buttons on the case. This is not the Wifi version. I cannot change any settings once the cam is inside the case. I can easily change settings in GoPro though.
3. Not so compact with the case.
4. Unrealistic blue sky. It can be attractive, but to me, it is way too artificial.
5. No battery can be added to extend recording time
6. All input/output ports on the bottom of the cam. I do not know how I can use any ports including the Mic input simply because it cannot be used with the case. Also the cam cannot stand without the case, so I have no idea how to use the mic input or other ports while recording.
7. No dedicated photo mode like GoPro. It has the interval (timelapse) mode where photos are limited to 1920x1080.
8. Slower start up time.
9. No adjustable beep volume on Start/Stop button. I need louder beep sound from the cam to acknowledged record start/stop when my recording environment is noisy.
10. No underwater focus solution has been released yet. Sony will release the flat lens door in November as a part of the door pack. The pack will cost around $50.
11. CA (Purple fringing) is pretty bad around corners especially in high contrast situations.
12. I could be wrong, but I do not see PAL 25/50FPS options. Not that I care for my use.
The reasons why I did not get the Wifi version:
1. Higher price of course
2. I cannot use Phones or Tablets to adjust the cam underwater or in extreme environment anyway.
3. More battery consumption
If I use the cam more above water, then I would get the Wifi version.
Conclusion:
I did not include GoPro Hero3 White Edition into this review because it would not be comparable that the white edition is the same old technology as Hero1.
Sony Action Cam's video IQ, SteadyShot, and image processor was the best among other competitors on land footage before Hero3 Black Edition came out. There are minor issues, but if Sony includes sound for 60fps and fix the underwater AWB, then I would go all the way with Sony Action Cam if you cannot afford Hero3 Black Edition.
If you can afford GoPro Hero3 Black Edition, here is why I like the Black edition better.
1. Better noise reduction under low light
2. More compact body with many mounting options
3. Sharper and detail image from higher resolution modes
4. Higher FPS and better low light from 120FPS at 720P
5. More accurate color and exposure
6. Less CA(purple fringing) and far less lens flares
7. Adjustable White Balance
8. Included Flat lens case for underwater
9. Much better Auto white balance underwater
10. Sound can be recorded at 60/120/240 FPS modes
Although I like the Hero3 Black better, I miss these Sony features.
1. Much longer battery life at all recording modes
2. SteadyShot is unbelievable
3. Less buggy
4. Nicer beep sound
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