The HMX10 has unusually inconsistent exposures across the frame. (Frame grab. The dark lines about 1/3 and 2/3 of the way down in the center are actual smudges on the target, though.)
Given the relatively low resolution of the sensor--1.6 megapixels--and the fact that the photos are interpolated, they're not bad. Certainly better than most cameraphone photos I've seen.
One of the HMX10's bigger quality issues is with exposure. Here you can see the real problem with blown-out highlights. Most consumer camcorders blow out highlights to some extent, but the HMX10 does unusually poorly. (Frame grab)
Though the HMX10's doesn't reproduce color very accurately--the tulips on the left should be more orange, for example--they're nicely saturated and pleasing. (Frame grabs)
The HMX10 delivers surprisingly sharp video, arguably because it goes for 720-line noninterlaced frame capture rather than interlacing two 590-line fields, as with 1080i video. The camcorder's lens also seems to focus closer than many models we've seen. (Frame grab)