Pros: Super-sharp images, Superior build quality, Fast auto-focus, well balanced on all but the smallest cameras, great for macro with some rings, pleasing bokeh thanks to 8 diaphragm blades, fast aperture great for low light
Cons: lens hood not included & expensive, lens hood poorly designed
Welcome to the world of Canon telephoto primes. Don't let the low price fool you - the only difference between this lens and professional L glass is the lack of weathersealing. Everything else is professional grade. Ring USM autofocus is faster than anything else on the market, period. Build quality is excellent and feels solid in your hands (it is in fact plastic but you'd be hard-pressed to tell without looking). Resolution is excellent. Like on almost any lens I stop down to f/2.0 or f/2.2 to sharpen up the corners a bit, but this is picking nits. This would be more necessary on a full-frame camera like the 5D2, but on crop cameras like the 40D I have no qualms about shooting wide-open at f/1.8 if I need maximum light-capturing ability. There is some purple-fringing in very high-contrast situations, but nothing that can't be cleaned up in 30 seconds in a RAW converter.
The 85 might not be a zoom, but it's still extremely versatile. It's not too big or heavy to put in a small bag & take with you anywhere. You'll get used to "zooming with your feet" very quickly, and you'll concentrate more on making a good photo instead of fiddling with a zoom ring as a result. I use this lens most for low-light work (clubs & concerts) where it's just long enough to get in close but not so long that you have to worry too much about blur from handheld shooting (if you're working in extremely low light, get an ST-E2 or small flash like the 220EX so that you can use the dedicated AF assist beam instead of strobing your built-in flash at your poor unsuspecting subjects).
It's also an excellent portrait lens, although on a crop body you may have to work a bit farther away from the model than you'd like if you're going for a "portrait Americain"; it's perfect for faces that fill the frame though. The wide aperture enables you to completely isolate the subject, and the bokeh (background blur) is quite pleasing.
One area in which this lens is often overlooked is macro. It's already not too bad as-is, but if you get a couple of cheap macro rings you can do some pretty amazing stuff. I've made a photo of the individual plant fibres in a bug-eaten leaf with this setup. Get ready to use a tripod or off-camera flash as you'll need to stop way down in order to get any useful depth of field with the macro rings on.
The one place where it falls short is the lens hood. It has to be bought separately and is not cheap, and the attachment system must have been designed in the '80s. It's hard to put on when you need it & it falls off when you don't want it to. Given the 85's other outstanding aspects though, I really don't care too much about these issues.
Given its low cost, the 85mm f/1.8 should be the first thing on any new Canon user's shopping list if you're serious about getting into photography. "It's a crime to go without a prime". If even the 85's budget is too rich for you, get the 50mm f/1.8 (about as sharp, but the AF & build of the 85 are in a different league). New SLR users are often put off by non-zoom lenses, but the whole point of having an interchangable-lens camera is being able to use the right tool for the job (if you're just going to stick with one lens, do yourself a favor & get a RAW-enabled compact instead!).