I actually own both an iPhone 5 and a Lumia 920 (the 925 is supposedly at least somewhat better, though I haven't tried it myself) and I can tell you that the difference in image quality isn't insignificant. Even outdoors in good lighting. The difference in clarity between the two is pretty astounding. Pictures from a 920/928/925 absolutely could be used in place of a dedicated point and shoot camera (aside from the lack of zoom) but I'd have a really hard time feeling good about replacing a P&S camera with an iPhone 5. Its pictures are slightly blurry and very noisy in comparison.
When I post pictures from my 920 to flickr or Facebook, people don't believe me when I tell them they were shot on a phone.
One problem that Nokia has, though, is that there was a bug in the firmware of the 920 when it first shipped making all pictures too soft, so nearly all reviews on the Internet dog it for poor performance outdoors. That was fixed with a firmware update in December/January, and its images are always better (much better) than the iPhone since then.
And I have to assume that the 925 performs at least a little better than the 920. That's what all of the reviews are saying. And I can't justify dropping $600 just to test a slightly upgraded camera for myself.