This is my mother's car, but I've been driving it periodically since she's had it. My uncle worked in the local Toyota dealership's service department for some time, and he supported the general consensus that Toyota's are mostly reliable (the Tercel in particular).
Dealership support has been average. Friendly service, but when we brought the car in for a general check-up they gave her a clean bill of health, despite the fact that one of the wheel bearings was obviously shot. We knew this going in, and didn't tell them on purpose just to get a fresh opinion. Oddly they didn't even pick up on it... Repair quotes to change the bearing were roughly double from the dealer than at other garages we asked. That's nothing new from a dealer though.
As one might expect, the performance is below average. A 5 speed probably has a little pep, but the 4 speed automatic dulls it considerably. You won't get much pull if you put your foot down. It won't win any drag races obviously, but it will keep up with traffic, and even fast moving traffic. This car doesn't pretend to be sporty, so any harsher criticism of performance would be fruitless. It will get you where you're going, so that's all that matters.
The transmission shifts a little bit harshly into second when the car is cold, but this goes away once the car heats up. The transmission fluid is fine, and the operation is otherwise normal, so I guess this is a common trait, or at least it isn't a problem.
The engine is a little coarse, which can become a bit tiresome since you'll have to rev it a little higher than the average engine to get up to speed. Road noise can be a bit loud at highway speeds as well.
My mother finds the car quite comfortable, but being 6'2, I do find it a little cramped while driving. I think this car was designed with shorter people in mind :) I also bump my head (frequently) on the hangar's just above the door. Not the most practical of designs there.
Visibility is a bit poor if you're tall. Compared to my Mazda Protege, it is a little more difficult to make comfortable lane changes. Also, the rear door windows steam excessively in cold weather, even with the heat jacked up, or the windows jarred down. We've yet to find a solution to this, but it's a nuisance more than a problem.
The suspension is tuned more for comfort than sport, so expect the ride to be pretty good. It'll lean a bit if you push the corners, but this isn't a car you'll be ripping through corners with anyway.
For what this car is, it's unbeatable. If you're looking for basic, cheap, and reliable transportation then you'd be stupid not to consider a Tercel. I doubt I'd buy one personally (young guy, w/a bit of a lead foot), but most people looking for a car in this class will want something reliable and cheap, and Tercel meets all of these criteria and then some.