I have owned several Canon A series, Canon SD series, the Canon S series and also the S2/S3 IS. So here's the skinny as an amateur user.

If you don't want to read the long review, here's the summary. Buy the SD1000 if you are looking for the tiniest camera that you can take everywhere. It takes good shots indoors given its tiny size and fabulous shots outdoors.

If smallness is not your top priority then you should consider some other Canon cameras which may work better for you (including others from the SD Series).

A series The A series is best for you if you're looking for a low cost camera that gives you a wide range of features, many manual controls and great image quality. Although, the size is bigger than SD series making it a jacket pocket camera, the advantage is in the styling. It gives you a convenient grip on the side which helps hold the camera steady and results in less "blurry" pictures. The mode selector dial on top helps you zip through selections. The convenience of AA batteries which are available in every corner of the world, no missing out on pictures as your battery was discharged, might be a selling point for those who travel a lot.
Update 11/10/07: Canon launched many new A series cameras in August 2007 with Image Stabilization and improved zoom. The 7.1 MP A570 IS with 4X zoom is cheaper than this SD1000. You may want to consider it seriously if you don't care so much about the slightly large the size and increased weight.

The S3 to S5 IS series cameras have a great image sensor, the wonderful image stabilization, a great zoom, and super macro function that can produce never before pictures. The flip out screen helps take shots from angles you've never considered before. The videos mode of the S series is also better with stereo sound and a sharp picture. The cameras in this series are also just a little more expensive and pretty bulky. If taking great pictures is all you care about and do not mind carrying a big camera, the S series will be a great choice. It's the first step towards a real professional camera.

And finally (drumroll) the SD series. Small. Cute.

The SD 1000 slips into your shirt front pocket without making it sag. If you're wondering about the style, the square "retro" design is boxy but I like it better as it is very compact. It also does not slip out from my fingers as easily as the curved edge ones.

Since the cameras in SD series are so small some features like different shooting modes are accessible only through the menu which makes changing between them more cumbersome. Sometimes I've just preferred to stay on Auto rather than missing the shot while I navigated to the right mode. SD series cameras also have less manual or user defined controls like flash power reduction which I miss. The flash incidentally, can get very strong in lower light or indoor situations and often bleaches out color from people's faces. If you turn off the flash then you have to use a tripod or have the camera on a flat surface to prevent shaky pictures. I also find that the smallness and lightness of SD series makes my hand shake more than when I'm holding the A series camera with the side grip. I get more fuzzy pics with the SD series than my A series (comparing the models without Image Stabilization) and it's annoying to see the camera shake warning each time on the screen I am trying to take a shot. I also get a little more red eye with this series probably because the flash is so close to the lens. On the SD 1000 however, there is a red eye correction feature so you can remove red eye right on the camera. The other improvement over the previous SD series is the automatic face detection which helps reduce the flash glare on faces so pictures come out better.

Having used many Canons, although I prefer some other models for their pictures, guess which camera travels with me most often. My SD1000. Just because it's small and fits into my tiny party purse or jeans pocket. Canon recently launched some SD series cameras with Image Stabilization like SD850 IS which is slightly more expensive and a bit bigger and heavier than the SD1000. I'd probably never take it along with me on daily basis and would miss some great photo ops...Many of my friends bought the SD1000 camera after seeing the size of my camera vs. its range of features (and the reasonable price!)

And what about some other Canon features? (If you're a regular Canon user skip reading this section, as you already know all this good stuff.):
It has an intelligent focusing system with DIGIC III (up from DIGIC II earlier) auto red eye correction and face detection (see above).

Goes up to ISO 1600 which improves it's low light performance. Although beware of camera shake if you turn off flash in low light. In my opinion, Canon has always out performed all other consumer cameras in outdoor pics. For indoor low light pics you'll have to turn on the flash or end up with grainy images. However, compared to other brands in the same class the SD1000 still takes pretty sharp pictures.

SD card slot cheap to buy 2GB cards.

Photo stitch For stitching together panoramic views. I have shot countless seascapes, 'bridge'scapes, and landscapes from all my Canons using this function and stitching together 6 10 shots in one. It's easy.

Macro mode Great for close ups of babies or product shots

The SCN mode (special scenes) Fireworks, Beach, Snow, kids and pets, Underwater, Foliage, Aquarium and Indoor is great. Now even amateurs can use Canon experience to get the best shot quickly before they miss the photo opportunity while trying to set manual controls.

"My colors" option Allows you to choose a color you want to highlight in a picture or even darken and lighten skin tones. Color Accent allows you to capture only a particular color in a shot while the rest of the picture is black and white. I did a black and white Christmas group portrait with only the Santa hats, ornaments and poinsettias in red color. Or with Color Swap you can swap out one color with the other, like change your car or (or hair color!) red to blue. The possibilities are endless, even my kid loves to use the color accent feature as it's really easy.

Special effects (B/W, Sepia, Vivid, Nuetral etc.) I've used sepia a lot when taking portraits giving them an 'old world' feel. Vivid has been helpful in special situations like a red kite against a blue sky to bring out the colors. You can do all this in Photoshop later but how many of us actually get the time to do this, once a pic is taken it's over with for me!

You can also take videos in 3 different resolutions with this camera and edit them right on the camera.

You can create a slide show of all the images you took on the camera itself with fancy transition effects of your choice, it adds to the fun when you hook it up to a TV to view your pics.

The zoom button shows one or many images at a time in the replay mode and you can zoom into each individual image to see parts of it closely. You can also add sound bites to your shots to remember a location.

While replaying, the images auto rotate to landscape or portrait mode to align with how you're holding the camera. It's a nice feature. The screen has been made more durable than it was earlier with an anti reflective coating.

All in all, if you want a small and sexy yet very feature rich camera go for the SD1000, you'll find yourself using it more often than your previous cameras.