I bought a Panasonic TS3 recently, for a week-long outing where I felt that I needed waterproof and dustproof. I got some decent shots, but it took a lot of exposure bracketing to compensate for the lack of RAW capture, and I did a lot of post-processing. None of the images were what I would consider critically sharp. Understand, I usually shoot with a DSLR or a Canon S95. I kept the GPS and all the other battery hogs turned off, and managed to get 1000 shots on two batteries over a period of 8 days.
If you need waterproof/dustproof/shockproof, and you're OK with shooting jpeg, and you just want something to email or print small it's a good camera. If you can protect your camera from the elements you could get a camera with the same image quality which weighs less and/or has a much better zoom range, or you can get a lot better image at the same weight as a waterproof.
I'm hanging on to the TS3, but mostly as something to throw in my pocket when I'm going paddling in case something pops up and I don't have time to open the drybox.