The hardware of the phone is excellent, even though the phone is a bit big for my taste (Read thick). But it has good battery life, a truly phenomenal camera and solid build quality. My problem is instead with the software.
First of all I hate that Microsoft has decided that the rules for how to use capital letters in the English language no longer applies to them (And unfortunately this is something that is carried over to Windows 8 and their other new releases too (See the all caps menu bar in Visual Studio 2012 for instance). The page that most epitomizes this on Windows Phone is the setting menu which has the top caption in all caps and then everything else on the entire screen is in lower caps letters except a few random lines that still have capital letters. My head hurts just looking at it.
Another problem with the settings menu is that there is no way (Except through some third party apps) to get a shortcut to certain often used settings, such as WiFi, Bluetooth, brightness etc... They also have completely screwed up the order of the settings. As an example airplane mode is something that to me is pretty used pretty often and on Windows Phone it is not even on the first page when you go into the settings application, but instead you have to scroll down to find it.
There are also a not inconsiderable amount of just plain bugs in it. Yesterday for instance it simply refused to let me answer an incoming call (The answer button was grayed out for some reason).
Next let's look at the search button. The phone has a big nice search button. However this button is not contextual, it is simply a shortcut to Bing, which leads to some really weird UI:s as in for instance the marketplace app where you have two identical search buttons one just above the other. The top one to search the marketplace and the second one for that all important immediate Bing fix.
I also dislike how the back button works, and just think that Android has got this use case pinned down better now (They used to behave similar to Windows Phone). To me you should never be able to go "back" further than the last time you were at the start screen and I just get confused where I will go when I can.
It is also a real shame that you are stuck with the stock keyboard. Granted it is an OK keyboard (Probably about on par with what you get on an iPhone). But if you compare that to Swipe or my personal favorite SwiftKey on Android there is a long way to go unfortunately.
The map application is pretty good and it seems to use a lot less memory to have maps offline than Google Maps does. The turn by turn navigation is definitely not as good though. It doesn't speak street names and as far as I can tell there is only driving directions (No public transportation or walking).
And finally it can't be ignored that the Marketplace (The app store for Windows Phone) is a desolate wasteland compared to Android or iOS. The number of apps does not truly show how bad it is, because even the applications that do exist are usually a lot less functional on Windows Phone than they are on other platforms (The Windows Phone version of Audible is horrible compared to the Android one). Right now the apps that I really need that are not available at all on Windows Phone are Run Keeper, Google+, Picasa (That actually integrates with the phone's photos, not a stand alone app), Google Voice (That integrates with the normal dialer) plus most games that I like to play.
That said there are several things I really like. For instance, the live tile concept is great! Now if only more of the apps used it properly. For instance the client for Picasa that I found didn't use live tiles at all, which seems very odd for a picture app. All, in all the platform itself does show a lot of promise and given a year or two they might be at a point where it is actually useful. Unfortunately it is not yet there.