Hi Phil,
I use a W12 with my Kowa 663 and find it works very well. The W7 and W5 have the same lens and features so should work equally well. As Ilkka has said, the lack of aperture priority mode is an annoyance, but it's nothing more than that, an annoyance. Here in the gloomy UK, it's rare that the camera switches to anything other than the "wide open" aperture. In common with most digicams, there's only 2 aperture options - big and small. I will often switch to fully manual mode if there's a huge amount of light around that stops the aperture down - doesn't happen very often. This might seem a lot of faff, but full manual is a doddle to operate on the Sony W series, easier to use than any other compact digicam I've used, it also allows you to compensate for tricky lighting situations that the auto-metering will get confused by.
The Sony has a nice big screen that lets you get the scope focus right, the camera AF fine tunes the focus very nicely (tip, use the centre AF, not the multi-zone AF) without hunting or hesitating. Startup time is fast, very fast, screen is easily viewable in bright light, takes 2x AA batteries that last for many days of heavy use and build quality is rugged giving a "quality" feel in use. Image quality is good straight out of the camera, I rarely feel the need to faff around with post processing.
The downsides? Lack of aperture priority as discussed above. It only takes Memory Stick, which is a bit pricier than CF or SD, but not hugely. Adaptors are not going to be available "off the shelf" except for the generic fit platform supports. I made my own adaptor, you can find details in the "why not make your own adaptor?" thread in the adaptors sub-forum. At least there is a "filter" thread on the body to take a fitting.
I'm glad to see that the Sony range is being discussed as a good digiscoping solution, it's been difficult to make people realise that there are any options other than CP4500/A95. Every camera has it's strengths and weaknesses, there is no perfect solution. Go and have a play with a Sony, it can work very well.
Duncan.