The Good The Canon EOS Rebel T4i delivers extremely good photo and video quality plus improved performance in Live View shooting over the T3i -- as long as you buy the more expensive 18-135mm STM kit. Plus, the camera has a more streamlined shooting design than its predecessor.
The Bad The feature set remains rather blah, and its photos aren't as good as the T3i's at high ISO sensitivities.
The Bottom Line A fine camera, the Canon EOS Rebel T4i's more expensive 18-135mm STM kit (or body with another STM lens) is the only version that merits an unqualified recommendation. You can probably find better alternatives if you just want a sub-$1,000 dSLR for still photography.
Good dSLR choice, but only if you opt for top-end
Editors' note, March 28, 2013: Canon recently discontinued the T4i and has replaced it with the nearly identical EOS Rebel T5i.
People who use Live View with autofocus for stills or video are the biggest winners with this generation of the top model in Canon's EOS Rebel series. The big updates to the T4i (aka the EOS 650D overseas) over its predecessor are the addition of a touch screen and the incorporation of a new hybrid CMOS sensor that includes both contrast autofocus sensors, the type of autofocus used in camcorders and other video AF systems, as well as the traditional phase-detection sensors you find in dSLRs. That said, the new sensor and expensive STM lens that you have to pair with it to take advantage of improved Live View autofocus really serve to bring the T4i into parity with newer technology, such as Sony's fixed-mirror SLT system and mirrorless ILC alternatives.
Overall, the photo and video quality of the T4i still rates as excellent, though at high ISO sensitivities it's slightly surpassed by the T3i; it looks like either the blue channel in the new sensor just isn't as sensitive as the previous one or Canon's processing the heck out of it. JPEGs are fine up through ISO 400 if you're not a pixel peeper; if you are, you'll find even slightly out-of-focus areas start to show some artifacts as low as ISO 200. At high ISO sensitivities the noise reduction is relatively intelligent, with suppression artifacts only in the dark areas and on some high-contrast edges. I suggest you don't use the default Auto Picture Style when shooting JPEG in low light, because it boosts the contrast and you really lose a lot of shadow detail. If you shoot raw, you've got latitude up to about ISO 1600, but you'll end up applying a lot of luminance NR to get rid of the hot pixels.