My mom got a 2005 Matrix XR 4 months ago and it has been solid ever since (70k kms).
Back in the summer, my mom had to rent a 2009 Matrix 1.8 and all I have to say is that the 09 had a better ride (16" wheels for 09 vs. 17" wheels for 05) and seating position, but the 05's interior build quality is MUCH better, and it has more cargo space than the 09.
Plus, I don't really like the 09's looks very much; I like the 1st gen's better.
Overall, the Matrix is just a Corolla hatchback; If you want an economical, roomy, versatile, and reliable car, the Matrix has no comparisons.
I actually decided that the first car I purchase myself will be a Matrix, but I wish Honda would make a Matrix-opposing hatchback/wagon based on the Civic, because Toyota's quality (interior, at least) is dropping as they cut corners more and more.
If Honda made a Matrix-fighter, their sales would skyrocket because there are A LOT of Matrixes out there, even more than Corollas.
Overall, the 2005 is a good car that has loads of space, even for people (you can fit 3 adults in the back without too many problems), is pretty fun to drive, and is based on the Corolla, so it'll last for a very ling time, and won't eat a lot of gas in the process.
No wonder I see more Matrixes out there than Corollas; because it's a Corolla that has more space and looks much cooler.