The display is resistive and although of course bad as the current top phones with capacitive screens, it will cost the district court only one-third.
For me this was about the only drawback, otherwise I can only positive reports. That starts with the resolution of the display. The GT540 has 320x480 and you can find almost any app in Android Market. Various competitors have in your entry android (HTC Tattoo or Wildfire, Samsung Galaxy 3) all a worse resolution and are more expensive.
I had before my LG HTC Tattoo, due to the low resolution and the miserable camera I resold it again.
The quality aspect of the GT540 I think that is excellent, and even is supplied to a printed manual. Mostly there is indeed only as a PDF on CD.
Conclusion: buy and have fun with it