I bought this car end-Sept 2006, after a fair amount of research. The one major decision enabler was the reputation of the City as a car made for India - Indian conditions.
I ruled out the CVT version. Ruled out all the American makes - GM/Ford, and Hyundai. Honda was anyway my first choice.
Went for the VTEC, since I wanted a loaded version, and I wanted a top-end engine. Actually read the rave reviews for the VTEC only much later.
So far so good - great to drive, great on handling, good power and excellent airconditioning. The Alpine music system is awesome.
I just wish Honda added ABS, and had palm-down door handle grips like most new cars do these days.
Exterior: Tail lamps well designed, chrome exhaust finisher, headlamps and chrome grille are a nice touch.
The VTEC is a world of a difference from the iDSi Honda City, and Id recommend this car highly over the competition.
Its been just over a month now (end-Oct), and I believe there are no regrets. The first service experience was exemplary, with almost hourly updates on service status. The pickup/dropoff driver refused a tip saying it was against policy.
For those that are considering the City - spend the extra $ and get the VTEC. Its a performance machine, and is frugal on fuel comparitively.