Desert Highlands Golf Club, Scottsdale, AZ

Mark me down as somewhat surprised by the negativity of the other reviews. I have played Desert Highlands a number of times over the past 13 years (through friends), and have always considered it one of the best golf experiences in Arizona. The golf course is challenging, balanced and intriguing at all times. Holes that stand out most are hole 1 (an incredibly scenic drivable par 4 with danger lurking at all points), hole 6 (a mid-length par 4 with split fairways and a tough green), the 9th (a long par 5 finishing at the base of Pinnacle Peak), the 14th (an incredibly beautiful uphill par 4 with Pinnacle Peak in the background), and the 16th (a 250 yard par 3 with a Valley backdrop). The only hole which falls a little bit short is 13 (?), a split fairway hole with the safer path leaving an overly-difficult shot to a well-protected green. Though I have played this course dozens of times over the years, I find each outing as enjoyable and eminently challenging as ever.
With regard to difficulty, DH is as tough as they come. Not so much in length (7100 yards), but in placement and shot selection. If you miss the grass off the tee, you are usually in big trouble. To score, you must choose the correct angle into well-protected greens, and choose the right club (driver frequently not recommended!). The par 3s are the real challenge, especially from the tips. Hole 7 (with an enormous bunker guarding the front and left) and 16 (250 yards!) are especially hair-raising- get a par on these holes and you are doing well. Over the years, they have softened the course a bit, with extreme undulations removed from some of the greens and the rough cut down a bit in some places. It was probably a good decision to soften it- even now the course is an severe test of shot-making and course management.
Conditions- in my experience jmarlin's comments above are way off base. The conditions at at Desert Highlands are top notch- I have never seen a significant problem with ball marks on the greens. This year (2011) in the few rounds I've played, the DH greens were better than any other course I visited throughout the valley- perfect receptivity, perfect speed, and hardly a blemish. The rest of the course was also in fantastic shape.
Location- as one would expect for the first great course to be built in North Scottsdale (1983?), the developers were able to get the pick of the litter when it comes to sites. This land was made for golf, and Nicklaus did a great job using the terrain to make a great course.
One note- when you visit DH, make sure you try the 18 hole putting course. A number of par 2s and 3s, it even has scorecards! Beat par here and you are a GOOD putter.
I have played pretty much all the top courses in Arizona, and this one is at the pinnacle. There are clubs with better facilities, amenties, etc. (e.g. Whisper Rock and Silverleaf) but in my book the DH golf course is tops.