You've been kicking around eBay, or maybe you've gone to your favourite Kitchen store, and you've started to see a new (relatively speaking) knife start to make it's way onto the shelves lately.  Santoku?  What's that?  Japanese?  The question becomes, what is it good for?  Do I want one?  In this guide, I will be comparing a Santoku to a German-style chef's knife.  This style includes such well known brands such as the Wusthof Grand Prix and the Henckels Four Star or Professional S.  The specific knives I have are:
Santoku: Sekiryu Full-Forged in High Carbon/Molybdenum Stainless Steel
Chef: Lagostina Pro-Clad in High Carbon Stainless

Down to Business: What are the Differences?

Taking a look at a Santoku beside a standard Chef knife, you'll notice a fair number of differences on the physical side of things, such as blade shape, weight, etc.  These lead to different uses of the knife, and as such, I will be doing this guide in two parts: Physical differences, and usage differences.  Before I start, here are a couple pictures.  The first is of a santoku, the second, a typical German chef knife.  I will be referring to these, so please come back to them.

Physical Differences

Blade Shape

The first major difference you will notice between the two knives is the overall shape of the blade.  The santoku is very leaf shaped:  it's got a much wider blade through a longer part of the body with a very sharp taper at the end.  The german chef knife is more triangle shaped: it starts out very wide at the base, but there is a gradual but fairly uniform taper to the tip of the blade.

Blade Length

The next difference is blade length.  The most common size santoku you'll see has a cutting surface (edged part of the blade) that is seven inches in length.  The typical german chef knife will have a blade that is eight inches in length.  Of course, lengths will vary, but in general, the german chef knife will have a slightly longer blade.

Blade Thickness

The next major difference between the two knives is the thickness along the spine of the blade.  While the blades of the two knives are roughly the same, the thickness of the spine (the top) of the blade on the santoku is about 1/2 as thick as the german knife, which makes a much thinner knife overall.

Weight

With a shorter and thinner blade, the santoku tends to be a much lighter knife (on average) than a typical german knife.

Grind Angle

When you look at the edge of a knife, the grind angle is the angle at which the sharpened edge of the knife sits compared to the unsharpened part of the knife.  A typical german knife has a grind angle of between 15-20 degrees.  A santoku generally has a grind angle between 10-12 degrees.  The practical upshot is that the santoku has a much finer and sharper edge on it than a typical german chef knife.

Steel/Wear and Tear

Of course, that finer grind angle has a few tradeoffs.  Since there is less steel around the edge, a typical santoku has to have much harder steel than a german knife.  This generally means there is more carbon in the steel used in a santoku.  This can mean a somewhat more expensive knife, but it generally means that a santoku needs to be taken better care of, since more carbon means it is MUCH more likely to rust or oxidize.

Handle Types

One difference that can often (though not always) be found is the size of the handle.  The santoku was designed to be used in a much smaller hand than a german chef knife, so the handle is often, though not always, smaller.  This is great for people (like me) that have smaller than average hands, as it makes handling a santoku much easier.  The tradeoff is that people with larger hands might find it difficult to handle a santoku, as it could be somewhat uncomfortable to hold.

Bolster/Handle Attachment

The last major difference between the two knives is how the blade attaches to the handle.  On a german knife, you will find what's called a bolster.  The bolster is the thickened part of the blade where it attaches to the handle.  As you can see from the picture above, it creates a natural place to put your middle finger when you hold the knife.  In terms of looks, the blade integrates seamlessly with handle of the knife.  On a santoku, there is a very definite end to the blade, and then a smaller piece of steel extends from the top and attaches to the blade.  In terms of attachment, neither is better, just different.

Usage Differences

Of course, those physical differences in the knives tend to lead to different ways to use the knife.

Holding the Blade

Because of the different ways the blades are shaped and attached to the handles, you typically hold a santoku and a german chef knife in a different way.   To illustrate, I will go back to the pictures I used before.
Santoku
On a santoku, generally, the point of optimum balance is at the forward edge of the handle, so that's where your thumb and forefinger go, and the rest of the fingers go down the handle.
Chef
On a chef knife, the point of optimum balance is just forward of the bolster, so that's where your thumb and forefinger pinch.  The bolster creates a natural "resting place" for your third finger, and provides a fairly simple frame of reference for hand placement.

Chopping - Knife Movement

The different styles of blade and the weight of the knife make for very different chopping styles. 
On a santoku, since the blade is much straighter and lighter, the typical chopping movement is lifting straight up and down off of the chopping board, regardless of the foodstuffs you are cutting.  This allows the weight and sharpness of the knife to do the work for you.
On a chef knife, there are three different styles of chopping.  For very fine things, like herbs, the very tip of the knife is used.  This is because it is very thin and provides good control.  For things like vegetables, the middle part of the knife is used.  The typical chopping motion involves rocking the knife forward (lifting the handle and rolling the knife forward on the blade) and bringing it down, allowing the weight of the knife to slice through the material.  For very hard items (such as bones), the very back of the edge of the knife is used.  This is because the weight is centred just under your hand, allowing for maximum force (but minmal control) to be used.

Chopping - How each knife handles different foods

Santoku - Since the knife is thinner and lighter, the santoku excels at chopping up hard and soft vegetable, meats, and just about any semi-soft, smaller foodstuff.  This is because the thinner profile of the knife requires less force to cut.  This knife is MUCH better than a chef knife at such every day tasks as chopping carrots and celery, meats, and herbs.  Since the the blade is also thinner and sharper, it also does a much better job than a chef's knife at cutting soft, hard-skinned fruits and vegetables such as tomatoes and peppers.  The two things it CANNOT do are cut through bones or carve up very large pieces of meat of fruit (such as a melon).  The blade is too thin and too delicate to cut through bones (it will break or notch the blade), and it is often too short a blade to carve large things (such as cutting up a watermelon).
German Chef - The typical german chef knife is a jack-of-all trades.  It doesn't do everyday chopping tasks as well as a santoku, but since the blade is thicker, heavier, longer and generally much more resilient (due to being thicker), it will do things like carve large cuts of meat (such as carving up ribs), large melons (such as watermelon), and cut through bones.  The german chef knife is a utility knife.  It does many things well, but it doesn't do specific things as well as a santoku.

So, What Should I Buy?

In terms of what knife will work best for you, it's somewhat a matter of personal choice.  If you don't cook that often or have somewhat larger hands, a german style chef's knife is fine.  It's a fairly useful knife for just about all everyday cooking circumstances, and will hold up to wear and tear quite well through the years.  Even if you do get a santoku, it's best to have one of these hanging around, just for circumstance where the smaller and thinner blade of a santoku is not optimal.

If, on the other hand, you cook on a regular basis or have smaller hands, than I would highly suggest you try a santoku.  For everyday chopping and cutting tasks, it's a fantastic knife.  Being lighter and smaller, it's less fatiguing than a german chef's knife, and is an absolute joy to use.  Personally, I have one of both knives (as can be seen from the pics above).  In terms of usage, I use the santoku much more than my chef's knife.  I only use my chef's knife when I come across a job which my santoku just can't handle.  This, however, really doesn't happen that much.

As to finding a Santoku, just about every major manufacturer makes one these days.  As far as quality goes, I've found the following companies make some very good ones:
Shun (Japan)
Sekiryu (Japan) <- This is the knife I have, and I love it!
Wusthof-Trident (Germany)
J.A. Henckels (Germany/Spain)
K. Dick (Germany)
M.A.C. (Germany/USA)
Sabatier (France)
Nicole Tableware (Portugal)
Calphalon (China/Japan)
Mundial (Brazil)
Again, these are companies that I have personal experience with their knives.  If you find another one that suits you better, go for it!