FiveFingers shoes are to water socks as gloves are to mittens. FiveFingers shoes are the shoe version of toe socks, which could not be called toe shoes because that name already describes a different type of shoe. They are the modern take on moccassins.
Vibram, already notable for making soles for Vasque hiking boots, is the only "official" vendor of this type of shoe, although knockoff are available, many of which use the Vibram or FiveFingers brand. These knockoff vendors offer different colors and materials (such as Lycra) which are not offered by Vibram.
These shoes are marketed as improving "your balance, agility, and proprioception." The idea is that humans are intended to perform physical activities while barefoot, and as far as muscles, bones, and tendons in the feet go, wearing these shoes is indistinguishable from being barefoot.
The departure from regular shoes go much further than the fact that the toes are separated. In every way, the shoes are designed to fit much snugger than other kinds of shoes. Inasmuch as they have thin, flexible, rubber soles, they are very much like pool shoes or water socks. However, pool shoes tend to have stretchy mesh tops, using spandex, Lycra or other elastic materials. FiveFingers tops tend to stretch very little. As a result, every part of the shoe, from the heels to the individual toes, conforms more closely to the foot, leaving almost no gaps or empty space between the shoe and the foot. Moreover, although FiveFingers shoes are water-permeable, they are intended for everyday activity, especially running or jogging, and not just watersport.
Vibram sells them in a variety of colors and styles at a variety of price points, ranging from 50USD to 125USD. There seem to be two different designs, in a sense. One style covers the entire foot below the ankle, with a strap at the top of the instep to keep the shoe from sliding around on the foot. This includes the KSO, KSO Trek, Flow, and Bikila designs. The other style leaves bare the entirety of the skin of the instep, like a slipper, with the possible exception of a strap. This includes the Classic, MOC, and Sprint style (the Sprint being the only one of these with a strap).
The strap is a single separate piece wrapping all the way around the ankle, held in position by a Velcro spot at the back of the shoe, such that both ends double back through a wide eyelet on either side of the shoe. One end of the strap is another eyelet, through which the other end of the strap runs and doubles back on itself, held in place again by velcro.
All FiveFingers shoes are available only with European sizing, no matter where they are sold.
Of all the styles, the most expensive seems to be the KSO Trek, designed for "light trekking, trail running, and travel" and this is the pair that I own. They come only in black and brown; mine are black. Everything but the sole and the strap (and a bit of mesh in one seam) is sewn from kangaroo leather, arranged so that the smooth, polished side is the only side contacting the foot. This makes them lightweight, tough, flexible, and abrasion resistant. They also come clean really easily.
I have seen many people using various types of FiveFingers for a variety of outdoor activities: hiking, running, climbing, kayaking, caving, cycling, and just for casual use.
I personally have used them for hiking, kayaking, caving, dancing, racquetball, and casual use. They are quite versatile.
FiveFingers shoes are quite comfortable for hiking, except if one must walk along medium- to large-sized gravel, such as might be found in a dry creek bed. In this case, every single rock can be felt through the thin sole. However, they are a terrible choice for backpacking, as carrying a heavy load calls for much more ankle support. Choose a properly fitted hiking boot instead.
They are nearly ideal for kayaking since they fit close to the skin and, therefore, are easy to wedge into the narrow space near a kayak's foot pegs, and, finally, are water-permeable, thereby preventing that annoying slosh from retaining water. However, I can't recommend FiveFingers more than standard neoprene kayak boots, since I have never used those. The downsides are that small amounts of sand will collect in them, and they do not provide a great deal of traction on wet algae-covered rocks. Probably regular water shoes with a ridged or cross-hatched sole would provide more friction. On the other hand, such shoes are likely to come off of your feet if you step in deep mud.
In caving, they come up a bit short on several points. They provide an advantage when climbing ledges and breakdowns, since the sole is thin enough to feel the rock to a greater tactile resolution, and their water-permeability is again a great boon. However, that thin sole also makes it easier to feel pointy ridgy rocks which can be painful sometimes. And the lack of any ankle support increases your risk of a sprain or worse, as opportunities to step the wrong way are ubiquitous in caves. But their greatest failing is again their lack of traction. They just can't stick in slippery mud the way a good pair of hiking boots can, making climbing or traversing mud slopes quite a bit more dangerous.
I would not recommend them for sports like racquetball at all. They have excellent traction on a hardwood floor and stopping and starting is no problem. However, the high impact of such a sport calls for both a thicker sole and more ankle support. (I have been known to chase down a ball, then bounce off the wall by kicking it as hard as I can with the sole of my shoe. This is much easier on the foot with a hard inflexible sole.) Opt for a nice pair of tennis shoes or cross-trainers instead.
Surprisingly, as odd as they look to someone who thinks to look straight at them, they don't draw attention to themselves, and as such, the bouncer at a local club said nothing about them when I went out dancing, and they were quite comfortable for several hours worth of that activity. Moreover, they make a nice conversation piece for strangers to introduce themselves by.
However, I must say that the best use, so far, that I have found for them is just for casual, daily use. They are as easy (or easier) to slip into as sandals, are lighter, and, since they cover the whole foot, can be worn year-round, even when it's cold out. One can also wear toe socks with them for extra warmth when it is especially cold. This arrangement is so comfortable that I have worn the same pair of socks without removing them (except to shower) for three days straight, just sliding right into my FiveFingers right before walking out the door. It's truly the closest I can get to feeling barefoot without risking a broken glass related injury. Sometimes I forget I'm wearing them, and sometimes other people spot them out of the corner of their eye, covered in mud, and wonder for a moment why I took off my shoes!
Update: Comparison between Sprint and Trek Sport (by Amy)
I have owned two different styles of Vibram FiveFinger Shoes. One thing that should be noted is the first style I had - the Sprints - had very little variation on the footpad and I did note they were somewhat slippery in caves or hiking/climbing on rocks. My second pair, the Trek Sports, have a bit thicker sole (the Vibram site says 4mm thicker) and much better traction due to the various ridges and such on the sole, making it more like a tennis shoe type sole but still keeping the idea of barefoot. I find these a lot nicer for caving in, actually. They are also a lot more comfortable for hiking, as the slightly thicker sole does give more protection from pebbles and such. The Sprints I could feel every little pebble and stone, hiking in them for a long ways did get to be somewhat painful, however, I have not had this problem at all with the Trek styles. The KSO Treks are made of slightly different material on the top (kangaroo leather) and are approx. $20 more than the Trek Sports, but the base sole is the same. Those are the two Vibram FiveFinger shoes that are made more for the hiking or slippery surface usage, and those are the ones I'd recommend looking at for such activities.
Ed. Note: The Sprints are also made from a less resilient material, as evidenced by the fact that she replaced hers after they were torn open on a piece of barbed wire.