While Photoshop is seeing a bit of competition from Core Image based apps, Illustrator is seeing a lot more competition thanks to Cocoa’s excellent support for typography and Quartz’s support for PostScript (i.e. PDF). The serious contenders I’ve come across so far are:
- Intaglio — the closest thing to a lightweight Illustrator replacement
- Lineform
- VectorDesigner
- DrawIt
- EazyDraw
And then there’s Inkscape, which is free, open source, and cross-platform, and — despite being built on X11 — quite usable (unlike The GIMP, showing us that The GIMP’s UI isn’t X11’s fault).
The best discussions of Illustrator alternatives I’ve come across are this head-to-head comparison on The Unofficial Apple Weblog and this collection of interlinked reviews from MacLife. Neither review discusses all the available options.  TUAW’s article covers DrawBerry, which I don’t consider a serious option. Neither review mentions Inkscape (screenshot below):
All of these programs have free demos (or are plain free) and are worth a look. DrawIt has the most radical interface and, if it actually allowed you to import and export vector files (such as SVG and editable PDFs) it might be a lot more useful. VectorDesigner suffers from this problem and the inability to transform more than one vertex at a time. Lineform is hampered by a lack of useful primitives (such as polygons and stars) but this doesn’t affect its use for freeform illustrators.
In general, for simple stuff, most of these programs are remarkably less annoying to use than Illustrator, but remarkably less precise. Illustrator offers powerful snap and guide options that none of these programs come close to matching, and explicit control over the rendering of stroke joins, dashed lines, and so on. Ultimately, I think two of these programs (Intaglio and Inkscape) are perfectly useful for almost anything , but ultimately only Inkscape offers anything approaching Illustrator’s precision.
In this case, the best option also happens to be free. Interesting times ahead for Adobe.