Google Analytics vs Raw log files (via something like AwStats)

"Ignoring the actual reporting, Google uses javascript tracking with cookies and sessions versus log file parsing from webalizer and awstats -- log files are much less sophisticated at understanding distinct visitors, paths and sessions.

Ignoring all other reporting, with GA and other robust analytics tools you can track funnels and conversion activities on websites. This means you gain a single place to see how your paid search, organic, display, email and any other campaign is doing at driving sales. With standard log tools you just see traffic.

Ignoring advanced reporting with GA you have the ability to add one segment variable which you can track. This could be returning vs new customer, membership type, gender, whatever you want. Reports can be keyed off of this to give you basic segmentation information on everything from user paths & flow to conversions. Of course with more advanced tools (Webtrends, Omniture, Coremetrics) you can do dozens of these variables and get into really powerful data insights.

So if you ignore 90% of the tool and look at just 3 features you can see how much more there is already."

http://www.sitepoint.com/forums/showthread.php?t=556517