Background and context:

I currently own an old Canon DSLR - 1000D or similar - and had it for four plus years. So since last year I have been hunting for a replacement, one which lets me overcome the limitations of the current camera (more of that in a minute), leverages my investments in canon line-up (specifically: EF 17-40mm L, EF 50mm 1.8, EX 460 flash).

I will go through my experiments/purchases, coming from a DSLR user, share how did I end up buying the X-M1 .. and what I think about it

What was I looking for:

1. Shooting in low light - my current camera maxed out at a sort-of unusable 1600 ISO. I bought a flash and learnt how to bounce it etc - but with new cameras and capabilities, the point of flash in casual settings became less and less frequent.
2. I gained a decent bit of expertise on using manual controls - using AEV, aperture and shutter settings - and getting delicious bokeh. So advanced controls was another thing I wanted in my new camera.
3. Video capabilities: I saw sample videos of DSLR cameras - and wanted to be able to take videos with the bokeh in the background, and do low light videography with high image quality
4. More resolution: In-spite of what other people say about resolution - I like to blow up the image and look at it - admire tiny details that might be missed in the overall shot when looked on the overall photo. Obviously this depends on the shot.. but my 10MP felt limiting
5. Good image quality with JPEGs: I didn't know I felt I needed better quality at first other that low light - but didnt want to loose image quality. That said - I dont do RAW conversions - and I know I am probably not going to do it in the future either.
6. Compactness: This came in as a later requirement - when I started noticing that I would use my phone more and more, and DSLR less and less - since it just was too bulky to take around people's places or trekking. That said - initially compactness was not on top of my list
7. Compatibility with my Canon equipment: I have made a bit of investment from my perspective in Canon EF equipment from last several years - nice flash 460 EX II, EF 17-40mm F4.0 L, and my first prime - 50mm f1.8. Plus B+W MRC filters. So to me Canon was the company to go for
8. Sturdiness: I have dropped my DSLR a few times on hard surface, gone to beach-side, been in light drizzles - and that thing keeps on clicking away. Want my next one to be similarly sturdy since I seem to be getting clumsier with age.

What have I tried thus far:

I waited for a few years for a good camera. I didnt want the EOS T4i / 60D since they used the old sensor - in general if sticking with Canon - why not go full-frame, right?

So I got a EOS 6D with 24-105mm F4.0 L lens plus another full frame zoom. That thing took very nice shots - the smoothness of the image and tone of color was amazing. However, the camera system was immense, esp with three lenses to carry around, and that multiplied with the complexity - resulted in my not using the camera to even part of the potential.

The next camera I eagerly waited for was 60d's replacement - hoping for something that is sturdy and takes amazing pictures. I got the 70d soon after it was released, and tried it a bit. The camera felt better than my current camera, though nowhere as good as 6D, and images were just plain ordinary. So - returned that.

Why the XM1:

I have followed a lot of photo sites in the last several years. Steve digicams, stevehuffphoto, dpreview, dxomarks, kenrockwell... they all have different perspectives and preferences. But the Fuji X system seemed to come across as a good one to look at. I couldnt find sensor or lens ratings at DXO for the fuji system - but dpreview had great sensor ratings for jpegs, and stevehuffphoto and other sites had a lot of reviews. Many of them talked about the compactness as much as the image quality. Focus speed was an issue mentioned in all of them - so it is something I had to come to terms with.

The tough thing about the XM1 or XE1 was - there was no camera available to try out and see. Meant I had to buy it and try it out. After returning the 70d, I pretty much became open to trying out something new and compact. Along came XM1 with decent rating in dpreview, plastic body with a new cheap lens and reasonable price.

Initial impressions of XM1:

I have had it for several days now - here are my initial thoughts. Note that I will keep comparing it to Canon DSLRs time to time - though I will try to give stand-alone information on XM1 at the same time.

Handling: This camera is small and tough to hold in one hand - esp if you are coming from DSLR. There is no grip, and the plastic is a bit slippery. Even compared to point and shoot - it is tough to hold because you have the big kit lens to balance. Holding with two hands is required.

Viewfinder/screen: It obviously comes with the screen - and there is no viewfinder. That screen takes getting used to - the screen is a bit tight to manipulate and so far I have not found it as easy to move etc like say a camcorder or even the flippy screens on other cameras. The screen itself is nice and bright, and comes with good options for what kind of information would you like to see on it

Control: I am a guy - so won't read a manual - right :). Kidding aside - controls is one place that this camera is still taking a little getting used to. E.g. on P mode - how do I adjust shutter and aperture; how do I change shutter speed in movies; where was the ISO again; how do I go back to viewing pictures if I zoomed out.. This may be a factor of me learning new things when moving from DSLR, but definitely not very intuitive to operate.

OIS: The OIS works ok but not great. I consider myself a steady hand - taking photos from my hand with my DSLR with kit lens OIS with exposures around 1/8 to 1/4 seconds (maybe even 1/2 if lucky). It is not possible with this camera. Not sure if this is an OIS issue or focus issue - the OIS does not work great with video either - there is more shake when making video in this camera than Canon 6D with EF24-105 F4.0L.

Focus: Not easy to do perfectly - that's one thing I can say without sounding negative. Not having a viewfinder, and instead a small green box in the screen - takes some getting used to. The focusing itself takes time - maybe fraction of a second depending on light. It is not easy to just move quickly and take a snap - the subject has to be a little still to get a decent shot. Where to focus has also been challenging - I try to shoot a subject, but it ends up focusing on the wall painting behind. Learning to focus with this system is going to be important to getting usable shots - it is definitely way tougher to use for me than a DSLR.

Wifi: The software etc is not very friendly. On the canon - using the wifi was easy - not so here. I just use the card now. Seriously Fuji - please do a firmware and software update to get this right.

Compactness: It is tiny coming from DSLRs. Very easy to pack - though not pocketable with the zoom lens. Still - taking photos of people suddenly is not a scary thing for them. A compact holster for XM1 will be very handy - will search for it.

Sturdiness: Not tried it so far. Doesn't feel very sturdy though - I am not sure if it will survive a fall onto hard surface. So I bought an accident protection plan.

Image quality: You might be thinking - why has he given it 4 stars. This section is the reason. The image quality is worlds apart from my existing DSLR. Not surprising - since I am using a 4 year old camera with kit lens. But even then - it was a huge improvement from my original DSLR. Not just that, it is also better than the photos shot from the 70d (outdoor, indoor) which was double the price. The colors, tones, are just amazing. In fact, the quality was almost on par with the 6D with the kit L lens. Quality referred here is my own non technical judgement - blowing up the image and seeing each detail; looking at overall color of skin, sky, surroundings in the shot, seeing the clarity of the images at low light. Just the fact that I am comparing a ~700 dollar camera (the price I paid for the kit) with a $2500 kit and saying it is almost as good or better - should maybe explain what an awesome tool this is for capturing beautiful images. It definitely puts the other camera/kit lens combinations I tried in the same price point to shame.

These results are with the cheap plastic kit lens - this sensor has phenomenal reviews with prime lenses - so at some point I will get one or two of them (or maybe XF Zoom) and use those.

Overall - I am happy with this purchase, and while there may something to decide between this (XM1) and a camera three times its price (6D), for now I will happily use this camera.

I love this little camera, the silver body with silver 27mm lens is most stylish combination. A 4 star review is pretty darn high for me to give. (I'm not into "star-inflation") but this little camera earned all 4 stars. It's lightweight, fits in my purse, yet takes photos that look as good as those from my Canon 5DM2 -- that's a pretty good trick for such a small camera. I love the little onboard flash and the articulating LCD which is great for taking candids (you don't need to move the camera up to your eye, just hold it in your lap to shoot--your target has not clue.)

The lenses are nice, even the low-priced 27mm. What a bargain.

I'm a semi-pro with 20+ years experience from film to digital.

To begin with I am a canon DSLR owner on my third DSLR 60d with a couple of prime lenses(50mm, 85mm) and a nice L lenses. I bought this specifically for a European trip with the kids because I did not want to lug my DSLR around. Overall I have to say this camera produced the some of the best ever pictures we have ever taken. Here is my summary:

Lens:
Sharp throughout its range, I could not detect any defects in the images. The quality was on par with a L lens. Since this is a f3.5 the brokeh was not as nice as a 85mm, but it still produced very nice brokeh, the colors were nice and was almost as sharp as a 50mm prime throughout its range.

Camera:
Amazing pictures, and I loved the pop produced by the Velvia effect. Amazing jpegs, and I can use 90% of the images produced without editing. The noise level was on par or even better than a DSLR. I also loved the usability and most of the layout of the menus. I was able to figure out most of the features,however I would recommend reading the manual because there are some weird quirks.

I used this with aperture primary mode with face detection. Focus was mostly quick and accurate. Not as quick as a DSLR, but then again since this is not using a viewfinder having a similar level of accuracy is probably not possible.

I initially thought that I would regret not getting the model with the EVF, but not so. I found that having the tilting LCD allowed me to compose quick, and take pictures at unusual angles at very crowded locations in Paris and Italy. An other advantage is that when you ask somebody to take a picture there is no explanation needed :D.

Cons:
Its easy to accidentally change settings. Make sure you check the aperture, exposure etc before taking a picture. Its good practice to do so anyway.
If you select silent mode or any bracketing mode it will turn off the flash, the flash will not fire even if it is popped up. Focus and flash cycling is slower than a DSLR. But then again I am comparing this with a DSLR which it is not, so keep that in mind.
In AV mode during daylight I have to set meter + a few notches if not the images appear a bit darker. Note that when there is a lot of light the preview appears a lot darker than reality, so keep that in mind and don't overexpose too much because of that.
The wifi app works(tried on android) but it is a bit basic and has its own quirks. For example when you browse, view and image and go back it does not remember the location, which is quite annoying when there are 100+ images.
The only other con is the lenses are super expensive. Unlike Canon there are not $100 primes , etc, but judging by the quality of the kit lens, one is probably paying $$$ for some very good glass.

Summary:
Hands down this is the best ever camera I have ever owned. Produces vivid, and stunning images straight out of the camera. I am almost considering selling my canon gear, because images out of this little thing is so good. Seriously looking at the x-t1 as the next camera.

What I was promised was Fuji's entry level X-Trans camera but what I got was so much more. Yes, the camera is built with plastic and there's only one FN button but the images I've been able to get from this tiny camera are great. The tiny size has been a very nice surprise and I assume that with the 27mm pancake lens it would also be the perfect point and shoot (even though it's an ILC). When I bought this camera I also got the Rokinon 12mm lens and using it with this camera has been a joy.

There are two things missing from this camera:
1) Focus peaking. Yes, it has it, but it's white and it sucks. Thankfully magnification takes care of this.
2) Wifi can only be used to share pictures and not to control the camera (that was a bummer).

I paid $289 for this camera and I regret nothing. If you already have an X camera this is the perfect backup. If you don't have and X camera then get this beauty and spend some money on the rokinon manual lenses until you can afford the XF lens or lenses that you want.

This camera gets a solid 4.5/5 from me.

Oddly, I've become a bit of a Fujifilm lover. Not sure why.
First camera ever was a Canon fTB-n 35mm brick. got so tired of carrying that 6 pound monster (with 35-105 Hoya zoom) that I gave up SLR's and bought an early Ricoh point and shoot and loved it. When the digital revolution arrived I started with a 1 mp Sony Mavica with a floppy disk! Moved up to a fantastic 2 megapixel Toshiba....then bought a series of Fuji's just by chance. Back in 2007 when I was flush and wanted a real legacy camera I went into my local dealer and said give me a Leica....and they asked me a few questions and I walked out with a Fuji F30 point and shoot, 6mp. Took it to Croatia and it is still some of the very best pictures I've ever taken and they compared very well with my Nikon D40. Fantastic battery life, fantastic low light, tiny, what pictures. Still have it, still take it with me on trips.
I currently have an Olympus OM-D EM-5 which was the treat I gave myself, and i love it. Weather sealed, the whole deal. Very complex and even a couple years later I still have trouble using all its features. But something happened a few years ago...I saw the Fuji X10. And I said, I have to have one of those. I bought one as a closeout after the white orb fiasco was fixed. And I have to tell you, that's probably the best camera I have ever owned (and that includes the D40, Lumix bridge camera, a bunch of Fujifilms including the F30, F40fd, F100 exr, e550, Canon S95, Canon G10 and a few others). Then I bought my wife an X20 which I think is even better. STarted coveting an X20 but then the X30 came out and I started pricing it. But in reality, it didn't offer much I wanted beyond an X20, and the X20 is arguably incrementally better than the X10....and while I was researching that I hit on a few reviews of the XM-1 that said it took...oh...extraordinary....exceptional....DSLR quality....pics. APS-C sensor. Not just good images, or acceptable....but extraordinary. It has cool lines. And then I found an open box brand new XM-1 for $417 with the 16-50 lens.
It took me a couple days to get its features down and OK, yes, it doesn't have panorama, which I like but I'll have the other two cameras with me....and it doesn't have a viewfinder, but you know? Neither did my S 95 and my F30....and I don't use the viewfinder THAT much anyway; i mean, hardly ever on my G10,....but I wish it had pro low light. Level? Never use it.
It is funny to me (I'm 59) to hear people talk about disappointing it is that it is plastic....horrors! Sit down kids and let gramps tell you a story....back in the 70's great cameras were things like the Nikon F, the Nikkormat, the Canon fTB-n, the Canon F1, Canon EF and Canon A-1, the Pentax K1000....all solid steel, designed to go to the moon and survive a nuclear blast. Then, around the early 70's two things happened. First olympus came out with the OM-1 which sort of blew the whole idea that an SLR had to be "big" out of the water...then Canon came out with the AE-1. Small, light, and....horrors...plastic....But it changed the whole ballgame, friends, and the beauty of the XM-1 is that it is solid and light. Yes, the lens isn't as solid as my Olympus 14-150 but it moves smoothly, is razor sharp, and does the job. The whole package is a bit remarkable.
It took a bit of getting used to to set it up so it focused properly, learn how to use MF, but the versatility in general is there. This isn't my everything camera; that's my EM-5, but I bought this because I wanted a sensor that wouldn't leave anything to chance for spectacular pictures. I'm planning on taking this to Europe in a few weeks and will put it through its paces; i'm looking for reliability, fantastic pics (I shoot jpg), looking forward to trying the wi fi and wireless transfer to my Ipad. It has enough filters and enough modes to keep me happy. Yes, Fuji, if you can put the same advanced options like pro low light and panorama in the next upgrade I'll be thrilled, but for now this camera has everything - very compact, lightweight, solid feel, good kit zoom, initial pictures I've taken are razor sharp, fast focus, fast start up, built in flash, and I like the tilting screen. Very minimalist and as you can tell from my opening sentences I am leaning toward simple. The joy in photography for me is taking the picture and enjoying it rather than sweating out over which setting to use and this fits the bill. It's got enough user settings to keep me happy and it will be very interesting to see whether I continue to use my EM-5 as much, although when the weather's lousy or I need my 2X digital zoom and 14-150 zoom lens It'll be with me...oh yeah, that's the one other thing my XM-1 lacks - the digital zoom. And as far as lenses go, invariably once I put a wide-tele zoom on my camera - 14-150, or 12-50 on my EM-5 or the 24-112 on my X10.....that's all I ever use. I never remove it. Carrying more than one lens is what killed my interest with my fTB-n.

So, 1-2 month update.
As I said, i bought this because I am an X10 user and fan; my "high end" camera is an Olympus OM-d EM-5 and you can see from prior reviews that I've owned Canon, Nikon, Lumix, and a bunch of Fujifilm. For some reason I like fujifilm. Not that I don't like my G10, or D40....anyway.

I bought this because I wanted an X30 but found this open box XM-1 with the 16-50 lens for $400 on Amazon. It has an APS-C sensor and I thought it was time to see what the big deal about sensor envy is about.
I just used this in France and stopped using it after one day for two reasons - one, there was a spot of dust on the sensor (as an open box camera this came - I am not kidding - with the body in a plastic sandwich bag. Once I found the spot and got rid of it - that disappeared. The other problem, and I wasn't sure why - was that many of my pics looked seriously over exposed on the monitor. I had to fiddle with the exposure control to make them look decent. It turns out this was related to my settings and the actual pictures on a PC or my Ipad were perfect. But for a day or two I was kind of concerned.
battery life is great.
I have found that low light is kind of tough to shoot with any setting except auto. Those are terrific. I find the Olympus is more customizable and that leads me to my conclusion that this camera is sort of a compact interchangeable mirrorless "bridge" camera, in that it is best suited for snapshots, travel, etc with some versatility. It is very lightweight, the 16-50 lens is tack sharp; yes, it doesn't feel like a metal camera but it is very solid and well made. I do wish it had digital telezoom and panorama function. I am confused why they'd leave those off. So it isn't as customizable as an em-5 but it doesn't purport to be. If you understand what this camera is, and that it takes, as DP Review said "astounding" pictures, you should be happy. I have learned that I am a fair photographer; i am not going to win awards, I love good travel pictures and put them in Blurb albums, I love color and love re-living my overseas trips, and occasionally I find a picture is really artsy. So for professional versatility and delusional fooling myself that I am really creative I love my Olympus; for amazing retro looks, feel, size, and complete versatility I am completely sold on the X10/X20 (and look forward to seeing what the consensus is on the X30) but if I was just going out on a trip and wanted superb jpg in a great package I'd happily take the XM-1. I guess there is aftermarket panorama software but I like the panorama function on the X10. Oh, and another oversight - no voice memo on the XM-1.
Deal killer? No. Would I downgrade? Not unless I felt I was misled by Fujifilm, and it was all right there in front of me when I ordered. If I wanted to spend more on a Fuji with those features I could have. if I want those features, I'll schlep my EM-5 along.