When I bought this lens I was originally looking for a relatively light-weight portrait lens for my D700. I had been using the 50mm f/1.8 on my DX cameras and it wasn't working out quite the way I liked with the FX format of the D700 sensor. I was using an 80-200mm f/2.8 for D700 portraits and the lens was quite heavy (great for portraits, but too heavy).
Initially, I went out and bought the 85mm f/1.4D. It was a great lens. Light-weight, fast, nice bokeh, but I found myself wanting to be further away from the model to get more compression. Looking back at the metadata from previous shoots I found I was shooting the 80-200 mostly in the 100-150mm range. I took the 85mm back and I picked up the Nikkor 105mm f/2 DC. It was a nice lens but I didn't like the de-focus control option. It seemed like I was too busy trying to control the lens and I wasn't paying enough attention to composition or the models.
Next I picked up the 105mm VR. It was the right size (a little heavy, but not too bad), it had a nice fast aperture for shallow Depth of Field, and it had VR for shooting in lower light. Everything I was looking for in a portrait lens. The best part was the fact that it was a macro lens as well. I had already been contemplating buying a new macro lens so this sealed the deal.
This 105mm macro lens is a relatively new update to Nikon's original non-VR 105mm f/2.8D macro lens. It seems as if Nikon completely redesigned this lens. The VR version has 14 elements in 12 groups (as opposed to 9 elements in 8 groups) as well as Nikon's new Nano Crystal Coat which helps to reduce ghosting and flare. With Nikon Silent Wave Motor, VR, and a mostly metal body this lens is much bigger and heavier than it's predecessor. It takes 62mm filters instead of Nikon's standard 52mm like the AF-D version which is a shame because 52mm filters are easier to find and less expensive than the larger ones. Not to mention I already have a bunch of 52mm filters...
For portraits this lens is great. The Silent Wave Motor focuses super fast and quiet and the 9 rounded aperture blades give the out of focus areas a pleasing bokeh.
Of course for macro work this lens excels. It's extremely close focusing and can pull out great detail in the subject with almost no distortion whatsoever. Of course as with all macro lenses there is very little Depth of Field and shooting at f/8-16 is recommended to get the sharpest images possible. Anything below f/8 and the DoF is too shallow (although this can be used effectively) anything above f/16 and you start to lose sharpness due to diffraction.
There are a few things that you should be aware of when doing macro photography with the lens. First of all, VR is less effective at close ranges due to the higher magnification. At the closest focus distance for 1:1 ratio VR isn't going to give you a 4 stop increase in shutter speed. It's probably closer to 1 stop.
Although this lens isn't technically a variable aperture lens, When focused at close range the effective aperture is reduced. At 1:1 the effective aperture of the 105mm VR is f/4.8
This lens tends to lose focus easily and since the focus range is very wide it can be a pain to get back to where you need it. With portraits it's not too big of deal, but losing focus up close can cause you to lose the shot, especially when photographing living creatures. Since this lens focuses so fast it can take a few seconds for the lens elements to get the image back in focus. Switching the focus limiter helps when shooting portraits, but not for close-up work.
All in all, this a great lens. Since it doubles as a portrait lens you can lighten up your camera bag a little by carrying one lens instead of two. It's not a cheap lens, but with Nikkor lenses you have to pay for quality. This is easily Nikon's highest quality lens. It's built like a tank. There is no distortion, no chromatic abberation, and little if any vignetting. This lens is completely sharp from corner to corner even wide open. The Nano Crystal Coat controls flare and ghosting perfectly. You'd be hard pressed to find a lens that performs on the same level as this one does.