Recently I've been able to finally heal some heroics on my priest. His average item level is around 338 and is lacking in the mama regen department, but I managed to keep everyone alive pretty well.
Overall, I feel very comfortable with healing as Holy. Compared to my Paladin, I feel like healing on the priest has a slower pace to it. I don't have to constantly cast spells on a normal pool because I can let Renew and Prayer of Mending do most of my work. Staying in Chakra: Serenity makes Heal even better with the improved chance to critical, and having my Heal spells refresh Renew is a great tool for keeping it up on targets without having to spend more mana.
As far as overhealing goes, the main culprits were Renew, Prayer of Mending, and Prayer of Healing. There are times when Renew is ticking before the tank has taken damage, and Prayer of Mending heals for over 10k when the target only took a hit of 7k. But, those heals are always going to contribute to overhealing, my problem is Prayer of Healing. I've found few situations where all five party members require me to use Prayer of Healing (and Circle of Healing for that matter). It's gotten me thinking that if this spell is only going to heal 3/5 group members (at best), then I should just cast a Heal on everyone instead. Obviously time becomes the limiting factor here, but I think that I'm going to start limiting my use of Prayer of Healing so that it's not overhealing so often. Circle of Healing may be in the same boat, but it doesn't heal for as much and it's cheap and instant.
All in all I am really enjoying how healing on my priest feels. I feel comfortable with my mana and my output (providing a fight is not going terrible), and with tools like Lightwell, Leap of Faith, and Body and Soul I really like the utility that I can bring.
I'm going to try to test more on the PTR and post about how Mastery is for Holy Paladins in 4.2, so we'll see how that goes.