Google Analytics recently took a huge step forward in the release that they did on October 22nd. I reviewed this with Brett Crosby during an interview recently (that will be published in the near future, but not today). Two of the biggest shortcomings in Google Analytics were the lack of segmentation and the lack of custom reporting. Both of these are now built into the main interface:
I know the image is a little hard to see in detail, but notice the segmentation selector that I have circled at the top right. This appears on any of the report screens, making it really easy to do visitor segmentation. Not only that, you can easily do custom segmentation as well. Here is a look at the main segmentation screen:
In addition, the custom reporting functionality is pretty cool too. Google has provided this through a simple and intuitive drag and drop interface:
There are several other features added, but these two are by far the most important. Google Analytics has already established itself as the most popular solution for those that are just looking for basic data. With these additions, it has now become a powerful tool for much more sophisticated analysis.