I have a '97 Prizm that I really like, so I bought an '01 Prizm for my wife. Personally, I think they started to cheap out the newer models. My '97 with 112,000 miles on it feels, looks and drives better than my wife's 01 (with 62,000 miles), not to mention being more reliable. Since I got the '01, I've had to put in new MAF and O2 sensors and had vibration issues with the tires. Now the charcoal canister has gone out for another $385. I've been very disappointed after my great experience with the '97. In all fairness to GM/Toyota, it seems like the previous owner really beat up on the car, which may explain some of the repair issues.
Great fuel economy - averages 33-34 mpg in all city driving. Has a smooth ride, although the steering is a bit numb. All the repair issues have been relatively minor- i.e. the car still starts up and drives each day. Feels pretty roomy for a small car.
The 3 speed auto was a terrible idea. It's fine in the city, but the engine really strains at highway speeds. Steering/handling is numb and not so responsive. Simplify the emissions system, or find a way to keep the components from going bad so quickly.