My friend and I took the new '06 Rav4 for a test drive. So here are some of my impressions, in no particular order:

• Acceleration was very good. Still not as smooth as the HiHy, but that's always the case of ICEs. There's that momentary dip in power or maybe a plateau when you're accelerating the vehicle from start and your still at the low to moderate speeds.
• The vehicle was actually more "nimble" than the HiHy. It's hard to articulate this, but the '06 Rav4 definitely felt lighter in handling and response, even more closer to a passenger car than a HiHy. Now, I believe a key reason for this better handling, and I don't have quantitative numbers, is that the Rav4 definitely felt lower than the HiHy, in fact so much lower that I didn't feel much of a height benefit in this vehicle than some of the newer passenger cars. (One of the key reasons that I bought an SUV was I got tired of driving my old Acura amidst the forest of lumbering SUVs; if you can't beat 'em, join them, at least on your own terms (i.e. hybrid)..)
• When idling at a stop light, you can hear engine noise, but it's surprisingly muffled, much more so than I would have expected. It's of course, nowhere near the glorious utter silence of the HiHy (which, btw I think is the killer feature of these hybrids), but it's quite respectable.
• There is an option for a third row seat, but I believe it's extra, and it comes at an expected price, less cargo space
• They've done a better job with folding down the 2nd row of seats. The HiHy has a traditional latch at the top and back of the seat you have to pull then pull the seat down. A bit clumsy. The '06 Rav4 has a nice latch near the back that you just pull, and the 2nd row seat flips down automatically. That's pretty neat.
• The 4WD is manual; you have to turn a switch to enable it, unlike the i-4WD which takes care of this automatically for you.
• The overall shape of the car is a bit too funky for my taste. I like the more traditional, albeit overly-neutral SUV-style of the HiHy.
• Now, the interior is really where you notice major differences from the HiHy. The interior of the '06 Rav4 is much more basic and unrefined, especially the dash area (at compared with the Limited HiHy). There is no nav system option. It does feel a bit cheap and "economical". Controls are pretty basic and manual. I don't even think it has an option for a 6-CD player. I wouldn't mind driving this if I was in my early to mid-20's, kind of out of school but still scraping by. But, let's just say the '06 Rav4 interior makes the HiHy interior feel pretty luxurious.

So, my "simplistic" impression of all this is that the '06 Rav4 is a economical/unrefined version of the HiHy, as the '06 HiHy is a economical/less refined version of the Lexus 400h. I would expect the '06 Rav4 to eat into the sales of the HiHy's for those with tighter budgets... but, then again, I expect those folks wouldn't buy a HiHy anyways.