Panasonic wisely didn’t mess with what was good with the DMC-TZ5, which was just about everything, when developing the Lumix DMC-ZS3, the next in the TZ-series. (Why it has a different name in North America as opposed to the rest of the world is beyond me.)

The first improvement is a wider view lens with a longer zoom range. The Leica DC Vario-Elmar 4.1-49.2mm (25-300mm equivalent) f/3.3-4.9 12X zoom lens is top-notch producing excellent images with good contrast and very low image distortion at all focal lengths. Built into the lens is Panasonic’s excellent MEGA O.I.S. image stabilization system that will give you blur free, hand-held pictures even at the longest focal length. Couple that with Intelligent Auto Exposure Control for perfect exposures–It actually works!–and you’ve got a winning combination for auto point-n-shoot picture taking.

If totally auto isn’t your thing, the ZS3/TZ7 has 21 scene modes, 7 image parameters, 5 white balance presets plus custom set, 6 AF modes, 3 metering modes, ISOs from 80 to 1600 (up to 6400 on Hi-auto), and shutter speeds from 8 seconds (15, 30, and 60 in Starry Sky mode) to 1/2000th second. There’s even a built-in flash with 5 modes. Plus, there are movie clips up to 1280x720 (HD) at 30 fps and a fantastic 3”, high resolution, 460,000 dot LCD to view everything on. It all makes for a pretty impressive little camera that will handle just about any shooting situation that comes along.

So, you ask, after such a glowing recommendation, what’s wrong with it? Very little actually. The only thing that could be called a caveat is image noise, but this is an inherent problem plaguing all small, high density image sensor cameras and not just something particular to the ZS3. What really matters is not that there is noise, but how well it is controlled without adversely affecting the image. In this respect, Panasonic has done a good job–better than most–reducing noise while preserving image quality. And that’s what counts.

Overall, the Panasonic Lumix DMC-ZS3 (or TZ-7, if you prefer) is the perfect, all-in-one camera for those who want more in a camera and are willing to pay a little extra to get it.