Panasonic Lumix DMC-LX3

In the last 6 years I've used a couple of compacts which I've since got rid of after upgrading to DSLRs (Canon XT and then 40D). For a while I was waiting for a compact that I could carry with me anywhere I want, and particularly to parties and other social occasions where bringing a DSLR is really not an option.
When this camera was announced it really looked like a dream compact for me. Fast, wide and optically stabilized lens is ideal for low-light indoor shots. The design is stylish and beautiful, the camera is quite compact and it has all the controls an advanced amateur would need.
Further the sensor is essentially as big as they get in compact cameras and with almost reasonable 10mp (still about 5mp too many but not as bad as 12-15mp you would get in any other compact with a comparable sensor).
I've had the camera for a couple of weeks now (and shame on Amazon for not having it in stock a month after it appeared in some other big stores). I like it a lot and the camera delivers on most of Panny's promises. Here are some of the experiences.
1. The image quality is certainly and noticeably better than the ulracompact cameras (like Panny's own FX series). It is however still a compact camera ... meaning there is visible noise even at ISO 80 and lots of noise at ISO 400. However noise reduction algorithms seem to be doing quite a good job and ISO 80 pics look very nice ... sometimes almost like a DSLR. And even at ISO 400 most shots are good enough to keep. In general the output from this camera is comparable to my 40D at 8 times the ISO (that is 80 on LX3 is about 640 on 40D and 400 LX3 is a bit better than 3200 on 40D). Fortunately, with fast lens and image stabilization I almost never need to use ISO above 400.
2. The camera is very responsive and the autofocus is fast and seems accurate.
3. Changing ISO through the menus is a bit of a pain but a variety of useful ISO regimes are provided. In general controlling all the options is not very easy ... but I guess that's the compromise you get with such a small camera with a large LCD.
Update: it is possible to simplify ISO changing by reassigning a button for this purpose. The drawback of this is that now reviewing pictures becomes more cumbersome.
4. Aspect ratio switch on the lens is more useful than I thought ... saves quite a lot of cropping.
5. Shooting in RAW+jpeg is fast enough to be usable.
6. The camera is quite a bit bulkier than it might seem (and the given dimensions are misleading since they do not include the lens and other protrusions from the main part of the body). It is not shirt-pocketable both because of its size and weight ... but fits fine in a jacket pocket or purse.
7. The macro capability of the camera is really excellent.
8. Having user customizable preset regimes on the dial is very useful and quite a luxury not present even on Canon XSi DSLR (shame on Canon!)

Overall it's a great compact camera: in my opinion certainly the best on the market by a margin (I've studied the market very thoroughly). It is in the same league as Canon G-series (which I owned back when they were the best and liked a lot) but fits my current needs much more than a Canon Gx. I also think it's a real bargain at around $400.
But it is still a compact camera with a sensor 1/8 area of most DSLRs and 1/20 of full frame (mostly pro) DSLR. So those expecting miracles like close-to-DSLR quality or usable ISO 800+ might be disappointed.
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A quick update in response to a comment:
1. At widest setting of the zoom there is quite significant distortion especially noticeable in 16:9 regime. There is also noticeable loss of sharpness in the corners. This might not look good in some shots (like if a straight like or someones face is close to the border) but nothing too bad for most of the shots.
2. HD video is very good for a compact. There is no zooming, no auto focus and sometimes exposure adjustments are not very smooth. So I'd not recommend to treat it as a camcorder. But overall it gives detailed and reasonably smooth video (well not quite 30fps smooth). I've just made a quick comparison with Canon HF10 dedicated compact camcorder (which is as good as they get these days). In bright light LX3 cannot quite match the 1080p detail of Canon. But in relatively dim light it is about as good. Also LX3 has a huge advantage in wide angle. All dedicated consumer camcorders have widest angle around 40mm which is much worse than 24mm of LX3.

Another impression which I have with LX3 and certainly did not have with other compacts is that it is a tool worth learning and investing some time and experimentation. My pics with this camera keep improving even the first ones were already decent.

For anyone interested in sharpness and noise level comparisons with some cameras you can check out
http://www.dkamera.de/testberichte/panasonic/lumix-dmc-lx3/bildqualitaet

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Update Dec 17: Finally Photoshop and Lightroom started to recognize LX3 raws. The quality of my pictures is now even higher: colors much more pleasing and noise reduction less "blotchy". Overall this camera gives results well beyond what I thought to be possible for a compact camera. So it still has my highest recommendation.

Update Jan 27, 2009.
The single most annoying thing about this camera is its lens cap. Having to remove it slows you down. Attaching via a string leaves it dangling ... which detracts from the aesthetics of the camera and can add a bit of extra shake. Without the string it's likely to get lost ... and I have not seen any replacements on sale. Anyway, fortunately, creative peoples found out that Ricoh LC-1 lens adapter can be easily modified to be used on this camera. I've did this and it works much better than the original cap. I've uploaded some pictures of the result to the product images. Use google to find the modification instructions.

First let me establish some credentials. I have been making photographs for 57 years, for personal satisfaction and for work. For 24 of those years, I also ran a part-time wedding photography business. I have been using digital cameras since 2001 and have owned many Nikon digital SLRs (D100, D200, D300) and a number of compact digital cameras.

With that out of the way, let me simply say, "the Panasonic LX3 is the BEST compact digital camera I have ever owned and, in my opinion, there is nothing else currently in its class that even comes close." I feel so strongly about the merits of the LX3, I am purchasing another one to put up for future use. It's THAT good!

Yes, its a bit pricey ..... no, it will not replace a DSLR for some things ..... no, it is not for everyone. Because of the limited zoom range (35mm equivalent of 24mm to 60mm), I would not recommend the camera to those who might need more zoom for outdoor sports, etc. But, if you can live within the zoom limitations, you will find the 24mm wide angle, amazing low-light capability and VERY effective stabilization system to be priceless.

The "iA" setting (puts the camera on "fully automatic") is the best I have ever seen, allowing anyone to routinely make outstanding images. For experienced photographers, the LX3 opens up a whole new world for compact cameras, used when it is not possible or convenient to carry a DSLR or used as a back-up or companion camera for your DSLR.

I purchased my LX3 in September 2008. Since then, my D300 and other cameras have likely felt very neglected! I have posted some sample images on this page.

O.k. Let me start off by saying that I bought this camera via 17th Street Photo's actual store in the photography district on 17th street here in New York City. I called (on Sept. 10th 2008) before I went to the store and I spoke with a super friendly man named Doug who told me that they got the silver and black ones and that they had 50 each. So, I went down there and immediately bought one. They have a 7 days no questions asked return policy so I tried it out like a crazy man. Keep in mind that if you mention the fact that on EBAY they have the price listed at $475, they will honor it in the store even though they have it priced at $499. Anywho, the purchasing experience with them was excellent.

By the way, I've been waiting for Amazon to have this camera too. I pre-ordered both of them (black and silver), and never received an email saying that they were finally available to purchase. So, I took things into my own hands and found it myself (which is explained above).

So, onto the previous testing and my current camera:

Before purchasing the LX3, I bought the fx500 from Panasonic (from amazon.com) and the Fujifilm f100 (from B&H) in order to try those out. I wanted to try the fx500 because of the 25mm wide angle lens, 5x optical zoom, and to see what recording movies at 1280 x 720 at 30fps was like. And, I tried the f100 because I was told at B&H that the f100 was the best non-noisy camera to shoot indoor shots without flash (FYI the best movie option on the f100 was at 640 x 480 at 30fps so I had no desire in trying that). I'll get to the results in a minute. Before those two, I was a Canon Powershot sd500 owner for more than 5 years and loved the camera, but I needed a new one for my honeymoon that is coming up on 10/12 for Hawaii.

Results of testing:

FX500: 25mm wide angle was awesome, 5x zoom was nice but focusing was a problem even after trying to focus 3 times (keep in mind my hands were steady as a rock so it wasn't due to camera-shaking). the movie quality at 1280 x 720 at 30fps was a nice improvement from my powershot sd500's 640 x 480 at 30fps, but in the end the actual quality and sound wasn't as eye popping improvement. Picture quality was very noisy, no matter all of the tinkering that I tried.

F100: yes, the picture quality indoors without any flash with this camera was better and less noisy than the fx500, but I ultimately did not keep this camera because of the poor movie quality, wide angle only goes to 28mm, the LCD is small and it's resolution is horrible.

So, sorry for the wait, but I thought I'd be as thorough as I possibly could about my review before the review.

LX3:

Keep in mind, I'd say that I'm an advanced beginner digital photographer. So, after owning the LX3 for almost a month, I simply have to say that I am SOOOOOOOO happy to have finally found the digital camera I've been looking for. I've read all of the digital camera websites out there, gone to the brick and morter stores to ask specialists directly, gone out and purchased digital cameras to test hands on, etc. etc. to finally come to the pleasure of owning the LX3.

What I was look for was a compact digital camera that had:

-Excellent wide angle: at 24mm, it's the widest I've ever used, and I cannot go back to a camera even with 28mm ever again. the 24mm on this camera is SICK! it blows 28mm out of the park. I haven't noticed any barrel distortion at 24mm. if wide angle is the main thing you are looking for in a compact digital camera, LX3 is where you will need to stop. and it doesn't stop there. if you get the lens adapter and purchase the wide angle lens, you'll be able to even go to 18mm!!!!. I haven't gotten that yet. Oh, I definitely do no mind that this camera doesn't have insane optical zoom options. I'm totally happy with the 24mm-60mm range. I found out that I personally didn't even use the zoom options that much when I had the sd500 canon that it's range was 35mm-115mm.
-Low f-stop: Finally the LX3 is the camera that steps up to the plate to offer an f-stop starting at 2.0. The slowest you'll see on the other comparable camera companies are at like 2.8.
-Excellent indoor no flash quality: If you use the "iA" mode in a low light situation it will most likely automatically use ISO400 to take the picture and in the darker parts of the photo (like shadows, etc.) there will be noise, which is common anyway. But, if you use the "P" or "A" modes and change the "+/-" with the "Q.Menu" joystick, it will lighten up the photo and reduce the amount of noise. I found this out on my own, and I've been INSANELY pleased with the difference. So, all in all, in indoor low light situations, I now use either the "P" or "A" mode over the "iA" mode.
-1280 x 720 HD movie quality: The fx500 had 1280x720 HD quality at 30fps, while the LX3 has 1280x720 HD quality at 24fps. And honestly, the LX3 resolution LOOKS and SOUNDS much better to me than the fx500. Movie after movie that I take, they look and sound amazing. i LOVE the movie HD option on the LX3. My advise, I bought two 16gb extreme 3 sdhc cards from amazon and I'll have no worries about recording speed and space issues.
-Easy to use manual controls: It took me no time to learn them. Easy breezy for a photographer at my level (again: advanced beginner)
-Easy to hold: I actually use the around the wrist cord that came with my powershot sd500 and that's fine. The LX3 comes with a around the neck strap (which I don't use). It does not come with an "around the wrist" cord. Maybe I'll use the "around the neck" strap for days that I would go on hikes or something like that. This is NOT a pocket camera. More of a "around the wrist" camera.
-3.0inch 460k resolution LCD: Best LCD for a digital camera I've ever used, and it's AWESOME. I'd rather have this than a 3.0inch 230k resolution touch screen LCD that the FX500 had.
-South of $500: Bought it at $475, no sales tax.

...and the LX3 met all of those requirements.

CONS: You do need a cap for the lens (it comes with one and a cord to attached it to the camera). Initially, I'd say that was the only semi-annoying thing, but I've already gotten used to it, and it's no biggie at all. It's a little tough taking vertical shots, but again ... not a big problem at all.

Any questions let me know. I've easily taken north of 2000 shots already of all different types. Honestly, I'm insanely pleased with this camera. Oh, I read in another review about noise at iso400. If you really want to keep a shot taken in iso400 indoors without flash and there is still noise in it, there is an AMAZINGLY helpful plugin used in Adobe Photoshop that you can get called "Imageonic Professional Noiseware" that does an amazing job in totally removing it.

Mark.

Panasonic has just released new firmware v1.1 on 12/15/2008, which adds these improvements to the great LX3:
1. Compatibility update for the DMW-FL220 flash unit.
2. Improved auto white balance performance.
3. Improved auto focus performance.

I love the LX3. When I go on vacation, I take the LX3 along with the TZ5, and I'm all set. In good lighting, the LX3 takes pictures that can compare to a DSLR. They're stunning. Even in low light, the pictures are still excellent. This camera is perfect for the person that wants a somewhat compact camera that has manual controls, and takes much better pictures than any point and shoot.

Update 1/15/09:
Panasonic released a new update today:

Improvements
Date/Version
1/15/2009 Ver 1.2

1. Improved white balance flash mode setting when DMW-FL220 is connected.
2. Proper setting of shutter speed on iA mode and Scene mode when OIS is turned ON.
3. Proper Exif information in the JPEG picture file.

Panasonic DMC-LX3S 10.1MP Digital Camera with 2.5x Wide Angle MEGA Optical Image Stabilized Zoom (Silver)

I'm mainly a film user. For digital, I use a Nikon D200 and this Panasonic DMC-LX3. I just went on a vacation to Zion National Park last month and just brought my Leica and Panasonic with me. The bulky Nikon was left at home. The Panasonic, with its f2.0 lens, gives excellent quality pictures, usable up to ISO400. That's equivalent to an ISO800 speed for a comparable camera with f2.8 lens. The camera does occasionally show purple streaks on the LCD preview when I focus under a bright back light condition, but the streaks don't show up in the picture. Not a big deal and tolerable to me. Hope Panasonic will have a firmware fix. Otherwise, it's a gem. [...]