Because I almost bought a Outback Sport instead of the WRX, I can detail the differences in detail.
There are three main diffrerences between the WRX and OS:
1. The WRX has a Turbo. (duh)
2. The WRX has automatic climate control.
3. The WRX has tilt and telescoping steering-wheel. (OS only tilts)
There are some minor differences:
1. The Wheels (Both are 17"s wheels to address an earlier question)
2. The Paint Job (obviously). There are four color combo's you can get, check them out on subaru.com
3. The Seats - The OS seats are a step up from the regular imprezas, they are not as sporty as the WRX, but the fabric is 100% better then a regular impreza. (Basically WRX fabric on regular impreza buckets iirc.)
4. The OS rides 2 mm higher then a regular impreza
5. Body Kit - The OS has the under hood and rear bumper guards. Different grill with chrome all the way around.
Other then those differences the OS has everything the WRX has, even some features on the premium like steering wheel audio controls standard and heated seats standard.
I bought the WRX because my wife and I like a little speed, but by far we felt the OS was the best bang for buck Impreza offered, and probably the best economy compact offered by anyone.
While previous year's OBS was a base Impreza with a package, the 2008 is a different animal. It's closer to a non-turbo WRX Premium, except the interior looks better. I initially start looking at and tested WRX/Speed3/GTI's before settling on the OBS
Given the features and capablity for a Corolla price, it may be the best value on the market today.
I just saw one of these at work today and I noticed that the Impreza Outback has our headlights, but in all chrome. This would be interesting to swap out our blacked-out ones for these chrome pieces. I am not knocking the stock headlights, I just like all chrome a little better.