The iPhone 4s alongside iOS5 makes a very compelling argument against a standard point and shoot camera in addition to a phone.

The backside-illuminated CMOS sensor included in the iPhone 4s(iPhone) is the same sensor found in the Sony Ericsson Xperia Arc and the Xperia Neo. Both of these cameras have faired very well in low-light comparison tests. Recent question about the sensor: What are the advantages or disadvantages of a back illuminated CMOS sensor?

iOS5 has made some major improvements to make the experience with the camera more enjoyable. The lock screen has a new way to access the camera that makes opening it up possible without unlocking the device. Images can now be captured not only by tapping the on screen shutter release, but by using the volume up hardware button. In actual use I found found this to be a huge improvement in certain situations. For example, I was taking shots at a concert venue, and holding the camera above by head with one arm. To hold the phone and use the touchscreen at the same time above my head is very difficult, but to use the hardware volume button as the shutter release was very easy and worked well.

If you search online you will find articles outlining how high of a priority the camera operation and speed was to the Apple development team. They supposedly shaved every millisecond possible off of the cameras start-up time to limit the dreaded "aperture" waiting screen that many of us are familiar with.

The iPhone as a camera does have some downsides, the two biggest being that it lacks any optical zoom, and the flash is nearly useless.

Some examples of photography with the iPhone 4 that I did can be found in this answer: How do I get the best results with a cell phone camera?

Overall, I have found the colors, white balance, and speed of the iPhone 4s and iOS5 camera to be very impressive and overall capable in replacing the need for a pocket point and shoot camera.

Some images straight out of the iPhone 4(not as good as the iPhone4s):