The flash on most point and shoot cameras is harsh and makes your subjects look horrible. It's fine if you're just taking a night shot of your buddies in a bar, but when you want slightly higher quality shots for your eBay photos or your "personal collection," you need something like this Marumi Ring Light to get more uniform illumination. This way there's not just one harsh flash light spot on the person's face. It still doesn't help those people who photograph their naked junk being reflected off a teapot on eBay, other than, you know, making sure their junk is lit correctly. [Enjoy Your Camera via DVice - DSLR Version]
Anyone who thinks this thing is a bad idea is an idiot. One area where point and shoots "excel" is macro. Even the cheapest camera can get a much closer shot than an SLR, unless you spend much $$$ on a new lens for the big camera.
The flexible arm adds even more usability to it.
This is a great idea, and one more tool to use to get "the shot". I want one.