Works, but with some limitations
I used mine for a week in Grand Canyon, and it did well. If you're spending time where relatively clear water, with easy access to a depth of 6" minumum is available, a SteriPEN may be for you. That said, the SteriPEN system has some limitations.
It's easy to contaminate your just-UVed water. It doesn't take much contact with dirty water to contaminate the batch, and using the SteriPEN with its pre-filter can present several opportunities for contamination. I found the best way to keep bottle threads clean was to pour some clean water out of the bottle.
SteriPEN does little to filter particulates, even with the pre-filter. Cloudy water may get sterilized, but then you have a bottle of sterilized, cloudy water. I also wonder at the effectiveness of UV sterilization on cloudy water. It'd probably be best to allow water to settle in a separate container prior to sterilization, just like every other water treatment method.
Low water levels make collection difficult, as does difficult access to the source. I camped on Longs Peak / Boulderfield recently, and trying to fill a bottle in that area would be very difficult. A traditional filter hose reached through the boulders fine (I used my MSR Hyperflow), but a SteriPEN user would be out of luck. Also, it's difficult to get all the way down to some water sources with a bottle in hand (undercut banks, snow, etc.) and stay dry at the same time.
Some situations definitely lend themselves to SteriPEN use. A kayaking trip would be an obvious example, as would most fishing or hiking trips that followed a good, relatively clear water source. Keeping a SteriPEN on hand to deal with urban boil orders for possible water contamination would also be a good use. If you want the cleanest water drawn from the backcountry, pairing a traditional filter with a SteriPEN will deliver, and without any chemical treatment. If you don't mind the weight of that approach, there's no better way to clean up water. Otherwise, stick with a traditional filter in the backcountry.
BTW, I found that pairing a SteriPEN pre-filter with a Nalgene wide-mouth Cantene was a great way to cut down on bulk.
UPDATE: July 26, 2011
I just returned from a canoeing trip in the Boundary Waters:
With relatively clear, plentiful, deep water everywhere, the SteriPEN was perfect for this trip. The only problem I had was dealing with the infernal continuity contacts. I believe they're designed to protect the UV bulb by not powering it up unless it's in water, probably due to overheating. Occasionally, it failed to detect the water, so I made a "jumper" from a fishing spinner to short across the contacts once it finished powering up. The SteriPEN wouldn't start up with the jumper in place, so after powering up, I used the jumper, then stated the sterilization cycle. It worked fine, then.
I'll make a better fitting jumper before the next trip. Other than this failing (and it's potentially a serious one), it worked fine. Someone suggested adding a little salt to the water to increase conductivity, and I think we're both addressing the same problem. A better design solution would've been to include a manual override function for this protective circuit.
I still think it's a decent product, but I won't take it along without a way to address this issue. For the money, I still believe a traditional filter system would be a better, more flexible water treatment solution.