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I really wanted to love this camera. It has everything I wanted: rugged, compact, waterproof, and takes great pictures. I currently have a Panasonic Lumix TZ-5, and a the Panasonic waterproof casing for it, and never used this combo with the Olympus Stylus 1030 SW around!
It was so easy to carry the Stylus 1030 SW around on the pool/beach and into the water. It starts up almost immediately upon pressing the power button so I never missed a shot. I loved that it was shock-proof so I didn't have to mentally treat it with kid gloves, and there are no protrusions on the camera to worry about breaking.
Now the bad news. After the first time going into the pool for about 3 feet underwater, the camera seems to be adversely affected. I was extra careful and followed the directions regarding checking the seals for foreign objects that may cause leaks, and they were properly closed.
I noticed that the videos taken (maybe from this point on, maybe always had this problem) had a smudge about the middle of the screen. This was not dirt on the outside of the lens where I can get at and clean. It would disappear under certain lighting conditions, but most underwater shots had it. My guess is that it's an internal reflective defect or dirt on the optics. Curiously, I don't notice it in my photos, just videos.
In addition to this, the lens would fog up during the night after some underwater excursions. The fog would cloud up the lens internally, so all photos and videos were foggy. Holding the camera in my hands would warm it up, causing the fog to get cloudier. As a work-around, I would air dry the camera each night with all its ports open, but this doesn't always work.
Another major drawback of this camera that was not publicized very well is that you MUST use the type M+ XD memory card to record VGA in 30 frames/sec. Using the included adapter my 4GB MicroSDHC card, you are limited to 10 seconds VGA 30 frames/sec videos. You can record lower resolution or VGA with 15 frames/sec videos without the M+ XD memory card, though.
Additionally, my videos would sometimes have strange regular very loud clicking sounds, about once click per second for certain stretches. This was very disconcerting.
I also noticed that the videos of bright lights indoors would sometimes have vertical glares above and below the light sources. I never noticed this phenomenon on my TZ-5 videos.
The final weird restriction that I found out only after using this camera was that it had two video modes: Underwater, and Non-underwater. In Underwater mode, you have no audio, but can use zoom. In Non-underwater mode, you can record audio, but cannot zoom. Perhaps the zooming caused horrible audio noises to be recorded so the engineers decided to never record audio while allowing zooming?
In conclusion, the Olympus Stylus 1030 SW was everything I was looking for on paper and would have been a wonderful all purpose point-and-shoot photo and video camera for all occasions. Unfortunately, my particular unit seemed not be quite waterproof as advertised, and the model had some major design drawbacks in the areas of video recording.
I really cannot recommend this camera based on the unit I had.
Update 9/6/08
The return process at Amazon.com was extremely smooth and painless. I definitely recommend Amazon.com based on their customer service.
Update 9/12/08
Upon looking at my pictures taken with this camera, I noticed that they did not have the proper orientation flag set. On my other digital cameras, my landscape and portrait shots have proper orientation flags so that programs like Picasa can auto-rotate. Not so with this camera. Seems like a strange omission from Olympus.
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