You can find a newer post about this viewpoint here : Phuket Viewpoint (Karon Viewpoint)
(this old post below is from 2007)
We took a little drive today from Patong to Karon and Kata, and along the winding road that leads to "The" Phuket Viewpoint (aka Karon Viewpoint). The view is one of the most famous images of Phuket, can be found on just about any website relating to Phuket, and is certainly the most visited viewpoint in Phuket. It's a short ride on a motorbike or in a tuk tuk from Kata beach. We passed half a dozen foreign couples on mopeds between Kata and the viewpoint. If you're staying in Kata or Karon, the viewpoint is a great stop off on the way to places like Naiharn beach, Promthep Cape and Rawai beach. You can make a very nice afternoon's sightseeing in this corner of the island.
There's really only one view from the Karon / Phuket Viewpoint. Just look North and you can see Kata Noi, Kata and Karon beaches, along with Koh Pu (the little island just off Kata). The little road that passes the viewpoint is not very busy, so you'll notice the peace and quiet. Then find your spot and look at the view to your heart's content.
Karon Viewpoint - Google Map
View Phuket Viewpoint (Karon Viewpoint) in a larger map