We recently replaced our old Canon with this new updated model. So far the improvements in this version have us blown away over our old camera.
Perhaps the most drastic improvement is in video quality. Our old camera took video like a home camcorder out of the 1980s. This one takes crisp sharp video with excellent sound quality. It probably is not as high quality as digital camcorders nowadays, but for the price and what we use it for, that one feature has definately been worth upgrading for.
The picture quality has also improved. Most of the controls remained the same. I use a camera basically to point and shoot when the kids do something cute, so it works just fine for me on that. It does have a lot of features around the dial that I don't completely understand, as well as ways to take pictures manually for people who really know what they're doing. The time it takes to take the picture from when you press the button to when the picture actually snaps has really been shortened.
However, the increased quality comes at a price - that is, in storage space. The memory card sent with the camera is a joke. It's the same memory space as two years ago, and with this camera, holds exactly seven pictures when at the medium quality level. Fortunately, we do have a bigger card that will hold twenty pictures, but not very much video time. You can get 2 GB cards for about $20, which is what we plan to do in the near future and what I would definately recommend for anyone buying this camera.