Pros: Mileage, cost, roomy
I'm a student based out of SF, and this car is absolutely perfect for both city driving and longer drives back home down the I-5 to Southern California.
The primary reason for my purchasing this vehicle was mileage (it's so awesome -- I add about 10 gallons to my car about every two weeks, and I drive a significant amount for a non-commuting student, i.e. I'll put over 12500 miles on my car this year). The secondary reason was the reasonable cost of this car (I had the impression that Prius's were out of my price range before I actually started researching). Lastly, I wanted something compact but that could accommodate friends/luggage on longer trips. The car as not disappointed in any of these arenas.
Once I finished reading specs and pricing everything, the only other car I was really considering was the Honda civic hybrid. I test drove both of these cars. It was no contest. The Honda has a cramped interior, my view out of the windshield felt obscured, and it was a difficult instrument panel to read. In comparison, the Prius has a very capacious interior, my view is unobstructed, and it has this great touchpad screen that integrates climate, audio, etc., so there aren't a million buttons crowding an instrument panel.
As far as downsides, my previous car was a 1994 Honda Accord, so I'm used to a bit of a slow start (lack of a real get-up-and-go compared to a sportier car), but the Prius definitely outperforms the Accord. It's pretty light (although it definitely feels solid to drive, safety-wise), so it jumps into gear pretty quickly. I never feel unsafe merging onto the highway or changing lanes, etc. But this is something to be aware of.
Any other questions at all, feel free to message me! I will give the full scoop on this great little car. :)