I've had the Caanoo for a few days and have been enjoying it. Unfortunately I caught a cold over the holiday, but that gave me a fair bit of time to lay down and play with it and tinker with settings. The build quality seems quite sturdy. The various ports (SD card, USB, power/TV out, etc.) have little doors that you unsnap to access them. It comes with a stylus for the touch screen that stows away flush against the device's contoured edge. The speakers are on the back -- on one occasion I noticed that my fingers were partially covering them while I played, but I haven't really noticed this often. (I've never had any handheld console before, so some of what I've been experience as far as getting used to holding it, I think I would encounter with any handheld.) As I mentioned previously, there is an issue with the plastic bezel around the screen obscuring about 4 or 5 pixels on the along the screen's edge. You can see these pixels by tilting the Caanoo, and with some games the score/high score display is partially obscured. But so far I don't think it bothers me enough to take it apart and get the Dremel involved.
Another thing some people have complained about is that the backlight of the screen seems to be slightly brighter toward the bottom of the screen than the top. The result is that on some screen displays, particularly text-based menus, there appears to be a subtle gradient of the colors. I don't really notice this most of the time while playing a game, and I think it actually makes the menus have a pleasant appearance. Aside from those last two issues, its build quality is great and it doesn't feel cheap or like some kind of knock-off device.
The Caanoo has an analog stick, which usually hasn't given me any problems with old school digital pad- and joystick-based games. For example, I didn't have any unpleasant struggles with Pac-Man and Ms. Pac-Man, which only register up, down, left and right inputs one at a time and cannot interpret an analog input of 90% up and 10% left. I did struggle with Burgertime a bit, but I felt that this was more due to the very specific alignment required to climb ladders -- I would expect a similar experience with Donkey Kong, some difficulty by the design of the game itself. (The last time I played it as an actual coin-op game, I also noticed how precise the game requires you to be to climb a ladder.) Overall, for games that actually have analog inputs, it's great to have an analog stick. For the digital input games, it's usually not a problem. The various emulators have their own deadzone settings, and some of them allow you to adjust this and some don't. Likewise, some emulators support features like multiple save-state slots, while others don't.
The screen has a resolution of 320 x 240, which matches hundreds if not thousands of classic games. The Caanoo also supports a TV-out signal which I believe supports a resolution of 720 x 480. The cord, which is sold separately for about $12 from what I've seen, plugs into the same slot as the power cable (and apparently charges the device as you use it) and goes to a composite RCA output. I haven't got this cord yet but it seems like a really nice option to have. It would be even nicer if there were newer types of video outs, like component or DVI, but as far as I know these aren't available. I haven't really looked into it a whole lot yet, though.
Of course, quite a few classic coin-ops have a vertical screen orientation. I have tried out the MAME4All emulator and it currently has four basic screen orientation options. Normal, Scale, Rotate, and Rotate Scale. For games that have a higher resolution than the built-in screen, Normal will display the game at full resolution in horizontal orientation in the center of the screen. Scale will stretch/squash the image so it fully fills the screen -- I was hoping it would just scale it to fit without stretching it, leaving pillarboxes on the sides, but that doesn't seem to be the case. Rotate turns the display 90 degrees clockwise, so the analog stick is at the bottom and the buttons are at the top, and displays the game at an unaltered resolution. Finally, Rotate Scale does the same and also streches/squashes the image to fit the screen. The scaling technique is something that I think of as a "nearest neighbor" technique, but I'm not sure if there's a more proper term -- rather than averaging the values of pixels that are scaled down to a lower resolution, it keeps an absolute value for the pixel. So the image is crisp, but with extreme scaling, small text can become illegible. Also, with scrolling games on a scaled display, you'll notice some "swimming" of the pixels as they move past. Nothing that spoils the experience, but it is what it is. Some of my favorite games that this rotation and scaling affect include the Atari Games mid-late 80s classics, APB and Toobin'. Both have vertically-oriented, high resolution displays. Both are quite playable, but you need to be the kind of person who enjoys the process of tinkering with the settings, remapping buttons and that sort of thing. As I was already pretty familiar with MAME on my desktop PC, this was quite easy for me -- the menus are laid out identically. But it requires a bit of a workflow -- you need to launch the game with the Normal setting in order to be able to read the menus; change your button mapping settings; then exit the game and re-launch it with the Rotate Scale display setting. A couple of times I accidentally 'broke' the settings by remapping buttons in APB, and it ended up I had to pop out the SD card, put it in my computer, and delete the .cfg file to restore the default settings. I'm not sure if there's an easier way to do this within the Caanoo's system menus, but I couldn't quickly find it.
Overall, I think it's a very fun and well-made device that has a satisfactory amount of support from the open source developer community. For someone like me, who doesn't program but feels comfortable tweaking and playing around with settings and doing a bit of navigating through text-based file structures, it's a blast. For people who are indie developers, I could see it being even an even more fun and satisfying device to work with. For people who aren't comfortable with manually setting up file hierarchies to get things going, it could be a bit confusing and trying of their patience -- there are some helpful people on forums, but it might not be worth it and they might want to stick with the type of gaming available with something like a smartphone.
I hope you enjoyed my impressions! Now, I'm off to settle a two-decade grudge with the Master System classic, Wonder Boy in Monster Land.