1.6x crop means the sensor is 1.6x smaller diagonally compared with 35mm film frame or "Full frame" / FX cameras.
The implications of this are:
* The sensor area is over 2x smaller
* All lenses appear longer than they really are
* Specially designed lenses (EF-S) are required cover ultra wide angle like 90-120 degrees
* less megapixels, but higher density, less dynamic range, more noise.
* cheaper to manufacture
* may be only a temporary stop gap in the camera market
* if you think about it too much you will soon spend £2k