What is this cartridge's niche?  What other round is it most comparable to in terms of accuracy, distance and cost?  Why is the round not more popular?

The round is acually extremely popular considering it was developed only a few years ago.  Just look at all the different manufacurers and models of guns chambered for it.  It's a very flat shooting rimfire that is good for small varmints, and supposedly has really good accuracy.  

I think it's niche is that there is really nothing else like it... there are other .17's out there, but they are centerfire cartriges that cost substantially more, and have a much higher velocity, so you can't really compare them directly.  .22 mag is close, but shoots nowhere near as flat or with the same velocity.

I feel it is a gimmick round, made up to sell more guns and create sales, for all it provides over the 22 mag ------ not a big deal.

I thought about getting a .17 HRM when all the hoopla surrounding it became evident on every gun rag in country. But when I thought about it rationally, the .22 Mag is a much more versatile round with a plethora of different bullet weights and styles available-  FMJ,HP,ballistic tip,etc. All you have in the .17, is a 17grn frangible round. Which would you rather use on fox, coyotes, and even turkey? It's not the .17 HRM.

It's certainly not a deer rd but it's sure hell on cats!

I can tell you one thing that I saw that was really impressive about the .17 HMR...  It'll punch holes in a cast iron skillet at 200 yards.  Lets see your .22 mag do that!  (Not that it is particularly useful, but it's still pretty cool.)

More and more people are praising this round, I may have to give it a look see.
here is a film of it hitting a coke can at 30 yards.
www.varmintal.com/17hmr.mov

I may be missing something by just looking at "paper" reviews of it's ballistics.

The only problem I have with the round is that it's a rim fire, and the price of ammo is too high.  

I think a better option would be to start with a 22 hornet type case (or something around the some size, but maybe without the rim) and neck the case down to .170.  This would allow loads/seating depths to be worked to a specific rifle, and the case to be re-loadable once blown out (cost savings in the long run, due to be able to re-use the brass and better accuracy due to the tight fitting case).

At around $10 for 50 rounds, I believe that the round/rifle is going to be short lived (or only tailored to a select few, like the 22mag), due to the lack of reloadable input to the round and the price of ammo. Granted that the ammo was designed to work around those actions of 22lr, with conversion kits offered, you’re still in the price range of top end match ammo, and this will be its demise.

P.S. Rifle/Ammo makers take note, take a 22 hornet case and necked it down, and make the barrels a lot faster twist than the hornet barrels with a shorter/tighter chamber and throat and you will take major sales from the .17 HMR.  The missing link to the 17MHR is the fact that it lacks reload ability. It may make sales because it can upgrade a 22lr, but in the long run, the rifle will lack the tack driving accuracy out to 100 yards that it is trying to fill.  

Point Blank, all that was needed was to design a 22 HP bullet with insert (fragmentation type) In 22LR.  This will work in a standard 22lr barrel (tighter twist), the lighter bullet can be pushed faster, and save shooters over having to buy a new barrel/set up.

Ammo cost is definately an issue, but with it's popularity I can only see more manufacturers coming out with their own products to compete with Hornady.  That's the nature of the beast, prototypes and initial products are expensive, but then costs fall...

Ammo has been less than $8 per 50 at www.midsouthshooterssupply.com since the 17HMR's introduction.  Finally, the gunshow prices are getting lower.  I've seen for $80 per 500 for the past few months....

I think the biggest boon for the 17HMR is that every rifle chambered for it has been quite accurate.  With the 22Mag, it's always been hit or miss as to whether a gun would get MOA.  The first 17HMR Rugers and Marlins (and the Marlins are inexpensive!) were all very accurate, so the press has all been favorable.

Another bonus is that the .17 bullets shatter upon impact, so ricochets are uncommon.

I'm looking forward to Ruger making a 10/17 autoloader.

I've got a Marlin with the heavy barrel including a 3-9x scope was $229. I love the gun.It's accurate as hell,lightweight,and great looking with that snotty heavy barrel.I shot a raccoon at 135 yds. right through the throat dropping him dead in his tracks.I've shot them before with my 22 mag and had them run away.Don't get me wrong, it's not a plinker for the $8-9/box of ammo but for it's price it's at the top of my favorite list.

I came across a set of pics about a year ago...

Here is an interesting use for 17HMR --------

Marlin17vss.I like it. More accurate than 22mag and more damage potential

Quoted: I'm looking forward to Ruger making a 10/17 autoloader.

There is a Company that makes barrels for the 10/22 magnum in this .17 round.

Quoted: I can tell you one thing that I saw that was really impressive about the .17 HMR...  It'll punch holes in a cast iron skillet at 200 yards.

There used to be photos on this site showing a .17HMR penetrating both sides of a Class II bulletproof vest. I found the thread, but the photos are no longer present in it:

www.ar15.com/forums/topic.html?b=1&f=5&t=193449

I'm looking forward to Ruger making a 10/17 autoloader.

I talked to the people at Ruger recently and thier official line is that they have no immediate plans to produce a 10/17.  There several companies making barrels to convert the 10/22 magnum to a 10/17 which I just finished myself and it is a very accurate fun rifle to shoot!
Check this out for some excellent info.www.artifex.ws/hummer