As a total beginner, this definitely peaked my interested in photography. Picked it up on Amazon for $496.95 with the 10mm f/2.8 lens. I went with this because this was the cheapest way into the the Nikon 1 series and the V1 didn't come with a flash. That and it didn't seem that the upgraded J2, J3 was worth the extra cash.
I know this is a controversial camera, but I think this is great for me- it's cheap, it's got some lenses, it's got a built-in flash, and it's compact and stylish. I would have been bored with a P&S and wouldn't have shelled out the cash for a DSLR or wanted a big camera.
I think it's only "controversial" for people who haven't used it. It's a great camera for what it does and the price reductions put it more in line with the value for performance index in my book. I bought my V1 before all the reductions but haven't regretted it.
I think it's controversial because of 2 reasons: 1) The price- time and time again, reviews complained about the original price. 2) How it fits into the market- people complain that it's not a P&S and not a DSLR. It's too expensive for a P&S and not advanced and as good as their D4 or D600.
Same kind of people who said the iPad was in between a netbook and notebook and not useful for either. Now that iPad (and similar) have killed off the netbook and had an impact on the notebook market. Not saying the same will happen with the Nikon 1 but shows that people are poor prognosticators of the market.