A few weeks ago I was contemplating purchasing a backup camera for my dslr system. A friend of mine had recently purchased a nikon 1, the j model. He was kind enough to loan it to me for a week while he would be gone and unable to use the camera.I shot all images in raw and was unable to open them until I recently upgraded to LR4. My initial thoughts on the camera were not good. The viewing screen is not great even in fairly dim sunlight, in bright light, forget about it. to get anything done beyound point and shoot in the auto modes requires digging through non sensible menu systems even to do simple things like ev control. Now as far as the IQ is concerned its not as good as my old g3 canon, I'd compare it to my wifes little Sony Point and shoot. one to one views appear grainy and the colors washed out. To make a long story short, I purchased the g1x and I am very pleased with the results. It's not as pocketable as the Nikon 1 but is superior in every other way. It's like comparing a dslr to a point and shoot as far as IQ is concerned.
I didn't write this to run down the Nikon, I'm sure for some it will be fine but I'll stick with canon.