Keep in mind my only good reference point is to compare it to the Canon 300D (aka Digital Rebel) which is really comparing apples and oranges. It does a very good job regarding picture quality. They are not as vibrant as the 300D but they are better than I expected. I suspect if the P200 optics were as good as the lenses I have for the Rebel they would be closer in quality.
The only real fault I have with the Sony is it needs a wider angle lens. Personally I don't see why they don't offer a 28mm wide end and cut the zoom down to 2X. This would make the camera just about perfect, IMO. I also suspect that the average person wouldn't see a big difference in picture quality between P200 and Digital Rebel pictures.
I also haven't had any trouble shooting in low light conditions. The flash could be stronger but I don't expect too much from such a small camera. The red LED that illuminates the subject for focusing in low light is excellent though. Overall, the flash and low light performance hasn't disappointed me at all. I also have had no problems with blurry pictures that some have had with the P150.
What sold me on the P200 is the size, speed and 7.2 mp capability. Aside from the wide angle end of the lens I mentioned earlier it has met, or surpassed, all my expectations.