The FT1 allows F-mount lenses to be used with 1 System cameras with impressively few limitations. AF-S lenses will achieve focus (using the cameras' phase-detection system, interestingly), and VR is supported using those lenses that offer it. Focus is 'single shot' only though - AF-C is not an option, and the system is noticeably less useful in poor lighting than we'd expect from one of Nikon's entry-level DSLRs, so although the 2.7x focal length magnification might be tempting, don't expect either the V1 or J1 to offer D7000-like (or even D3100-like) focussing speed or accuracy when coupled with one of your F-mount AF-S lenses.
AF-D ('screw drive') lenses will not autofocus, but a useful left/right arrow manual focus indicator on the cameras' LCD screens (and/or viewfinder in the case of the V1) is on hand.
Older F-mount lenses with no electronics inside can be mounted, and will work in 'stop-down' mode in aperture priority or manual exposure modes, but AF is (obviously) not possible and no on-screen focus indicator is displayed. You do, however, have the option of engaging the less-useful manual focus magnification display (see 'specific issues' on this page). For full compatibility information, take a look at this page on Nikon's website.
I had a few minutes at lunch time today, so I hooked up the Nikon V1 to my Nikon 300mm f/2.8 VRII lens using the FT1 adaptor. True to form, autofocus works very well (even better if VR is turned 'off'). I went out to look for some yard birds to photograph, but none were around, so I had settle on back-alley photo-opps. I set the camera/lens on a tripod, as the camera is small and lens is front heavy. The system is hand-holdable, even w/ VR 'off'. But I found more stability using the tripod, and will find it really useful to use a monopod. I snapped some images w/ the system, which gives me an effective focal length of 900mm (300mm X 3x-crop factor of the V1 sensor). For comparison, I also photographed the same items using the 300mm/2.8 VRII on my D300s (420mm effective focal length). First images in each set are from the D300s combo, while the second, more magnified images are from the V1 combo.
The following shows how depth of field is handled with the V1 and 300/2.8 VRII combo using the FT1 adaptor. The first image was taken at f/13 while the second was taken at f/5.6.
I am pleasantly surprised at how well this combo works together. I'll be giving it a try this weekend at HawkFest, so hopefully I'll have some bird pics to show. Stay tuned...