I printed some photos and graphics to test it out. I printed two photos from my 5 MP Canon Powershot A95, each picture onto a full letter size sheet of paper. One of my pictures was colorful and had lots of contrast/details. That picture turned out quite well - crisp, no banding and no artifacts present. The second picture was of my cat that is a long hair with patches of light and dark brown hair. It seems when there is less detail and contrast in the picture - meaning large sections of same/similar color it tends to look a little blotchy,not unlike when you have your computer set to display with a limited number of colors - it is not terrible but easily noticeable. I also printed some clipart from MS Word which turned out surprisingly well, very crisp.
Another thing to mention is that both the photos and clip art printed out very quickly - nearly instantaneously. Since I've never really used my printer for these purposes I'd have to say I'm rather impressed. I didn't buy it for this type of use - I had expected it to do worse to be honest with you. I would scan the prints and post them, but my scanner is crap and wouldn't do the prints justice.
I realize my impressions are subjective, so take it for what it's worth. For the money, it's a great printer. I only paid $150 USD for the thing, I can't believe it is going for $400 CND - that's over twice what I paid at the current exchange rate. Are you sure you can't find a deal online or something?
Good luck with your purchase, whatever you decide to get. Let me know.