For those not familiar with the device, simply put, a Fitbit in many ways is like a fancy pedometer for techies. It's a small and easily concealable device you wear that has the ability to track your activity, and at night it will also track your sleep patterns.
The Competition
I have been wearing a Nike Sportband while jogging, and thought a device I could wear all day would be great. I had been looking for such a device for a long time, ever since seeing The Biggest Loser contestants wearing a BodyBugg.
The BodyBugg is generally regarded as the most accurate you can get as far as accurately reporting amount of calories burned. The major negative for me for the Bugg was price ($249 + $80/year fee after the initial free 6 months - or more if you pay monthly). Also, a big drawback for me was it has to be worn on the arm for accuracy - which just isn't workable for me - too bulky.
I also looked briefly into the Philips Direct Life, which is more concealable, but again has a montlhy fee after the initial free period runs out ($99 for 4 months), so I ended up deciding to give the Fitbit a try.
The Good
I've had the Fitbit now for 2 months and generally am pretty happy with the device itself. It is easily worn with the provided belt clip and seems fairly accurate in terms of counting steps taken - which is what I mostly wanted out of the device.
It keeps a charge for a long time, so it's nice to not have to worry about charging it often, I would say it lasts 5 days or more on a full charge. It also wirelessly syncs when I'm wearing it to the base station on our computer if I'm within a few feet of it. It's really a nice feature to not have to manually plug it in, but I can't help but wonder about wearing another wireless device sending out some sort of electronic waves.
Here's a picture of what you get when you order a fitbit.

The hardware seems solid, I've dropped it a few times, & it's survived. It ships in solid (albeit probably not eco friendly) packaging, it comes with the base station, a nice belt clip, and an arm band for sleep wearing.

The sleep monitoring is interesting, but I've stopped using it. It basically gives you some data on how long it took you to fall asleep, how many times you woke up, your sleep efficiency, and how long you were asleep. Interesting, but I found I didn't really have any use for it & found I'd rather just not be bothered at night.
Here's a look at one of my sleep graphs to give you an idea 
In terms of step tracking and calorie estimation, it does a decent job. First, regarding the step tracking, walking around the house I counted steps and checked it and it was dead on if the fitbit was secured on my belt. However, I jogged on a treadmill with it, and noticed it was a bit off from what the treadmill and my Nike sportband reported for my run, so I logged into the Fitbit website and adjusted my run stride length and that seemed to fix that issue. I will put notes at the bottom of the blog post for those having fitbit calibration issues. Here is a screen shot of my activity level on a random day

Calorie estimation takes into account your BMR (what you burn breathing, heart beating, etc) plus activity the fitbit tracks. You do not have to manually enter activities done unless you're not actually moving, for example, doing weight lifting or biking.
Here's the graph of the calorie estimation for the same day the screen shot for activity level came from above.

I do like the blue LCD on the screen - it toggles between steps taken, miles traveled, calories burned, and an activity flower which grows with activity. It's just nice to have a quick indicator to use throughout the day to see how you're doing.
From everything I've talked about above, I like the fitbit a lot & would recommend it to those who are looking for some accountability regarding activity level. I have found it to be motivating to become more active - which is what I really wanted out of the device. Unfortunately, my review doesn't end there. There are some negatives with the fitbit.
The Bad and the Ugly
The fitbit device itself is great. However, there are some downfalls that come along with it. Some customers have complained about losing their fitbits because they fall off. I haven't personally had this problem, but it happens that I wear a belt most of the time that works really well with the belt clip. If I'm at home wearing "comfie" pants, I have had it fall off. Check out the fitbit forums, there are people concocting their own lanyard/tethers. Some women have decided wearing it clipped to the middle of their bras is the best way to go. Check out fitbit forums for threads on this issue.
Speaking of losing fitbits, since each fitbit has a unique serial number. There have been some posts on fitbit about a fitbit being found - it would be a nice feature if there was a lost and found feature where you could enter a devices serial and fitbit could contact the owner just letting them know someone found their device and is willing to return it.
Speaking of the fitbit forums, this brings me to the biggest downfall of all. The fitbit website. They created a great hardware device in a web 2.0 world with a website that doesn't hold a candle to the device.
It is helpful that the fitbit site integrates a food tracker so theoretically you could easily see a daily calorie in/calorie out breakdown if you enter all the foods you ate. The problem is they are starting the food tracker from scratch, and if I enter a new food on the site, there is no way for me to share that with other members. So if I add my favorite Whole Foods cereal bars, and then someone else using the fitbit food tracker eats the same thing, they have to manually enter it too. Why not use the power of the internet to let people share their manually entered foods, mark inaccurate entries, etc?
For those that want the best of both worlds, until Fitbit gets better with food tracking, I suggest using the Sparkpeople food tracker which is much more robust and lets you search foods entered by other spark members. If you still want the calorie analysis on fitbit, no problem, go over there and create a 1 calorie test food. Then, once a day, you can go over to fitbit and enter your daily calories as one meal (say you eat calories, enter 1600 servings of your 1 calories test food).
The Fitbit Team also came up very short on the forums section of the website. In a world of social networking, I just don't understand how bad the forums are. They decided to code the forums from scratch, there's no easy way to see your posts, follow up on posts or watch them. They finally did add searching functionality within the forums, but it took months to come out. I think the fitbit team is doing the best they can, but I question the decision to not use a pre built forum application and instead concentrate on other improvements to the device as I assume they must be short staffed.
They have recently implemented a leaderboard so you can compete against your friends on the fitbit site, it updates daily, works as advertised.
If you have a question about the device, you can try posting to the forums, but expected limited success. Jerrod is apparently on the team and will answer sometimes, but because the forums are so poorly laid out, he misses many posts. You can email the support team, but some have reported they don't always get an answer there - although others have reported wonderful customer service experiences, so I guess it's the luck of the draw. I haven't contacted support directly, but I have posted on the message boards several times with some questions being answered, others not.
Some other software related complaints, it's generally accepted you'll lose a pound if you have a weekly ~3500 calorie deficit in a week. There's no easy way to see a weekly breakdown of your activity on the site, but maybe even worse, the fitbit site gives you no way to download your data to analyze it yourself. At the time of this blog post, 7 weeks ago someone posted on the forums about getting our data in CSV (or xml) format, and the fitbit team has ignored the post. I took to manually putting my data in a spreadsheet, which works, but is a pain. This is something I'd pay a (small) monthly fee for. They are supposedly someday releasing an API that might help with this issue, but I'm not holding my breath since it took months for forum searching to become available.
I waited months for mine on backorder, it looks like they are still on backorder, but now the wait is only about 6 weeks. If you're thinking about the device, maybe place your order now to get on the list, you will have an option to cancel before it's shipped if they handle it like the initial pre orders (and you aren't billed until shipping).
Finally, it's a little annoying they have no blog/twitter/facebook official presence. It's 2010, guys, customers want interaction.
Final Thoughts
In the beginnings, the shortcomings of the fitbit.com site really bothered me, but all things considered I've decided the positives of the devices at the price offered outweigh the negatives on the software side. The fitbit is exactly what I wanted. It accurately tells me how active (or inactive) I am without a monthly fee & it can be worn without being seen. I hope in the months to come, the team will be able to grow and maybe address some of the software/site issues and make it a more social place to gather.
Additional Note - Fitbit calibration help
If you're having trouble with the fitbit calculating distance ran correctly, I found this info on their message board to calibrate it. Get ready to run a known distance (either a track, treadmill, or something you can accurately map via GPS or google maps). Before you start your run, hit the button on the fitbit so it knows you're recording an activity. Run as normal. Then hit the button again to end the "recording." Now it's time to go to your computer and see what the fitbit recorded for that activity vs what the treadmill/GPS/google maps told you ran.
For example, if you run 2.5 miles according to the treadmill and the fitbit calculated about 4400 steps but only 1.3 miles - you know the fitbit needs to stride length adjusted. 2.5 miles = 158,400 inches (63,360 inches in a mile) and then divide number of inches by the number of steps, 158,400 / 4400 = 36 inch stride rate. Fix this in the profile section of the fitbit site and go for another run, in my case, this helped tremendously with jogging accuracy.