A nice sensor, sharp lens, and good JPEG processing all contribute to the RX100's generally excellent photo quality.
Noise and JPEG quality
The RX100 has generally very good JPEG processing and noise reduction; it does a creditable job of balancing tradeoffs between color noise and softness. Out-of-focus areas still suffer from mushiness as low as ISO 400 -- a common problem with smaller-sensored cameras -- but in-focus spots stand up pretty well until about ISO 800. Overall, the camera's solid up to ISO 400 and acceptable through ISO 1600, depending upon scene content.
The camera produces very nice low-ISO-sensitivity shots with lovely tonality. It doesn't have a neutral Creative Style, so the photos have Sony's typical Standard look, high contrast with pushed saturation.
The one issue I've noticed with the RX100 is that bright highlights on yellows get completely blown out. They're unrecoverable from raws in Sony's Image Data Converter software, but they might be there for better software.
ISO 1600 JPEG photos look fine at 50 percent; I don't know if you can get better results by processing raw, since the only software available as I write this is Sony's cumbersome Image Data Converter, which seems to use the exact same noise-reduction algorithms.
There's a slight bit of distortion at the wide angle (look at the bottom-left corner of the 1954 brick), which probably means Sony's doing in-camera correction, since there should be more at 28mm equivalent. On test targets, there's enough distortion in the outer corners at f1.8 and f2 to introduce a little fringing.
The camera's default Standard Creative Style pushes the saturation and contrast a little more than I'd like, but remains within acceptable bounds -- no significant hue shifts or loss of shadow detail. I do wish there were a neutral option, however.
In addition to the usual set of filter effects, Sony has a few unusual and well-executed ones. The illustration effect offers three intensities (the weakest and strongest shown here). I'm not crazy about the user interface -- instead of letting you set the variations for a single effect, Sony lists them independently so that you have to scroll through a seemingly huge set of effects to find the one you want. For instance, while most cameras will let you set the sharpness zone for the miniature effect, Sony instead lists it as six different effects that you have to scroll past: one with the sharpness zone in the middle, one on the left and one on the right, with analogous choices for vertical.