Though the app isn't perfect, iHome has worked out some early bugs and continues to improve the app and make small feature enhancements. (A full accounting of the app's features is available at iHome's Web site.) All in all, the concept of making what's essentially a robust, software-upgradable alarm clock is a great way to go. That said, it would be more ideal if the app automatically launched when you docked your iPhone (alas, you have to launch it yourself). It's also worth pointing out that if you have a bulkier iPhone case, you might have some trouble docking your unit, but you should make a connection just fine with the standard slimmer cases (yes, your device charges when docked).
The iA5's not going to blow you away with its sound, but it certainly sounds better than the typical clock radios of yesteryear, including some of Sony's Dream Systems. For those living in dorm rooms or smaller bedrooms, it can serve as a passable primary sound system (barely), but the reality is that it's more suited to serving up background music at mid to low volumes. (Yes, the iA5 is GSM-shielded, so a docked iPhone won't cause any annoying interference on the speaker.)
The dearth of a built-in radio means that you'll need to use your iPhone/iPod Touch for anything you want to listen to. That's fine if you've loaded it up with lots of music (iTunes) or plenty of streaming apps (Pandora, Last.fm, AOL Radio, Sirius XM, NPR, etc.), or if you've bookmarked iPhone-compatible streaming sites. Just don't expect quick and easy access to your local AM/FM stations.
We also have a handful of design gripes. The dock locks the iPhone/iPod into the upright (portrait) position; that means you can't watch videos in the preferred landscape orientation, and the phone's top blocks easy access to the snooze button--not good for groggy wakeups. We were also disappointed that brightness adjustments (for the clock, the top power icon, and the iPhone screen) were all manual; at this price, we would've liked to have seen autobrightness adjustment via ambient light sensors. None of these are deal-breakers in and of themselves (for us, anyway), but taken together, they might give you reason for pause.
The iHome iA5 lists for $100, but can be had for about $10 less online. For what you get in terms of sound and build quality, that's a bit expensive (we'd like to see this more in the $60 to $70 range), but the app is free, so you could argue that you're paying the extra 25 bucks or so for that software--and the updates that come with it. So long as you're OK with that value equation--and you don't mind any of the design caveats listed above--we have no problem recommending the iA5, which delivers on its billing as an "enhanced" alarm clock.