After my overwhelmingly positive experiences of owning Canon PowerShots (SD700 and SD800), I was was pretty sure I wanted another. I looked at three:
SD1200: only 3x zoom, 35mm not wide enough
SD980: 24mm wide, f/2.8, 5x zoom, touch screen. Wow! But no thanks to focus problems.
SD780: 33mm wide, 4x zoom. Almost, but since I take a lot of no flash shots, f/3.2 is a handicap.

After some more searching I came across the DMC-FS7 with f/2.8, 33mm wide, and 4x zoom. Not a lot has been written about this model in either official or user reviews. Amazon.com has not linked the reviews for the various colors of this model, but even combined there are fewer than 20 at the time of writing, despite being available for most of 2009. Based on Panasonic's track record for building decent cameras such as the DMC FX37, DMC-ZS1/ZS3, DMC-LX3--and the irresistible price--I ended up buying this one. No it does not have the hefty 'quality' feel of Canons. After a couple of days, I'm actually preferring the lighter weight because I usually shoot one-handed. I only miss a contoured grip to stabilize the lateral motion required to operate the zoom lever.

What stands out about this camera is the quick access to controls. Exposure compensation is one click away. Forcing FLASH ON is available universally whereas my Canons allowed this only in MANUAL mode. In PLAYBACK mode, you can delete while zoomed in--also unavailable on my Canons. And when you are shooting with a special setting such as a scene mode, MOTION PICTURE, 16:9, etc., one press of the red button switches you instantly into iAUTO ready to take a regular still picture--and another press gets you back to the setting you were in. Much faster than a dial, especially if you like to switch back and forth.

As is typical with digital cameras, outdoor shooting on a hazy day or in consistent shade produces the best pictures: here the DMC-FS7 is capable of good tone, gradation and sharp detail. But introduce some sun and the bright areas tend to overexpose and lose detail. When shooting portraits by the window, even indirect sun can cause parts of cheeks to whiten. Unfortunately, fill-in flash is not much help as FORCE FLASH ON often results in washed out whites. I also get the occasional half stop overexposure when shooting people against foliage.

I really enjoy the 16:9 (HDTV) aspect ratio. At social occasions, it makes up for the not-so-wide 33mm focal length because you can frame 3 faces or a group of people without them having to lean inwards or squeeze together. In fact, at a distance where people fill the frame waist-up, this camera takes some very pleasant indoor flash photos. Beyond that, the flash is too weak. The wide format also brings a fresh perspective to environment and landscape shots. A 3:2 aspect ratio is also available, probably for film converts.

Panasonic has definitely skimped on some features to keep the cost down. In PLAYBACK mode, rotating the camera to vertical does not fill the screen with a vertically taken (portrait) picture. Unless Canon has a patent on that, why omit this feature? The download to iPhoto seems slower than the Canons despite both being USB 2.0 interfaces. And incredibly, it's possible to insert the battery pack back-to-front and still latch the cover closed! I only realized my mistake because of the gaping sides. Fortunately the flimsy cover flexed and did not break.

In summary, the DMC-FS7 is a well thought out camera with decent performance, some compromises in exposure, and amazing value. I can literally buy two of these for the price of a Canon SD940!
To Canon I say: for people like me, your current line of point-and-shoots are less attractive than your older models. The fact that an SD880 sells for $1,200 (4x original price!) on amazon.com attests to how real a problem you have on your hands.

TWO MONTH UPDATE:
Take a look at the shots I've posted under customer images. iAUTO has really impressed me over time. It senses the type of picture you are taking and switches on the fly to the appropriate scene/mode. My favorite aspect of this is its ability to switch in and out of MACRO without me having to press anything! Image stabilization works well. I continue to experience the occasional overexposure, but the bulk of photos are fine. Forget about setting the COLOR MODE to NATURAL. Anyone used to the boosted color of Canon point-and-shoots will find this underwhelming. STANDARD is the factory setting, and VIVID is for color junkies. I've since learned more about the new Canon SD940 with f/2:8 and 4x zoom. I would seriously consider it, but if I dropped my Panasonic into the ocean today, I think I'd still buy another DMC-FS7.

I bought this camera over a month ago and have taken and printed several pictures. I am very pleased with the quality of the photos and the ease of using and carrying the camera. It fits easily in a pocket. I also have a Nikon Coolpix that I have had a few years. I really like the zoom and image-stabilization on the Panasonic Lumix and the compact, flat shape. It also has a much faster flash cycle than the Nikon. So far, I like all the features that I have used on this camera.

On the heels of another reviewer, I just spent an hour going through years of archived photos having used the following cameras.

And to keep it short and sweet, I was shocked that the $137 Panasonic Lumix outperformed every camera EXCEPT for the HD Video of the new Canon SD780IS. However, the Panasonic family allows WVGA which takes up a LOT less disc space and perfect for Mac/PC viewing.

Canon SD200 = My first Elph camera worked perfectly in all conditions for over 3 years; ahead of its time. Under 1MB photos stored, but red eye reduction never worked.

Canon SD500 = Bought as upgrade with slightly noticeable difference for still & video, always kept photos in about 1MB size, worked like a charm before 2008 but red eye reduction never worked either.

Canon SD1100IS = the BEST Canon I have owned, but stolen last year. indoor, outdoor and video on AUTO were great! no complaints. Looking back, this camera outperformed the photo quality (all conditions) of the 12MP new SD780IS.

Panasonic DMC-FS7 = THE BEST BANG FOR THE BUCK PERIOD. the still photos and WVGA videos are amazing and AUTO setting for Panasonic is much more effective than Canon's technology. I was told the Leica lenses are far superior to Canon lens technology as well. This was also stolen overseas, so I bought the pricer FX48 below.

Panasonic DMC-FX48 = The still photos were NO different than the lesser priced FS7 and I tested all light conditions, speed etc. However, oddly, the HD video was terrible as compared to the Canon HD. It was very grainy and the motion sensor didn't work well. Sadly, I returned it.

Canon SD780IS = WHAT A DISAPPOINTMENT! I am overseas now again after tossing the box and papers, and now stuck with this this lousy camera. The HD video is amazing, but the auto focus never seems to work for stills, the PROGRAM mode is a royal pain in the *ss, the flash always seems to be too bright for indoors even after changing settings, and good luck trying to photo moving children - takes 1/2 day to focus and shoot. In summary, I changed settings and ISO and cannot get the same quality photos as the Canon SD1100IS (now 1200IS).

I AM BUYING ANOTHER PANASONIC DMC-FS7 AND SAYING GOODBYE TO CANON FOR NOW.

Hope this simple review helps, folks!

I bought this camera to replace an Olympus pocket digital camera that broke when I dropped it. Now I tell friends I'm glad that it broke! This is a super little camera that takes high resolution shots. Its easy to set up and use. I am an accomplished amateur photographer and have several film SLR's and another digital camera, and this one has enough features to do specific shot setups and good automatic settings as well. The video function also works well with a couple of different resolutions. The first shoot I did with this camera was a friend's wedding, and it performed excellently, taking good pictures in a variety of lighting settings and close/far and early morning, existing light, group shots, etc. Like most digital cameras, you have to take a few pictures to get it right, although the image stabilization setting helps a lot. I think for the price you really can't go wrong getting this camera. I can't say anything about the software that comes with it as I don't use it. Overall this is an excellent choice for a pocket style camera with high resolution.

Excellent built quality with all metal case. Camera menu is sensible with sufficient flexibility and is easy to maneuver.

Face detection works very well, and iA mode with dedicated button is useful. Particularly like the Extended Optical Zoom feature, and WVGA motion picture mode (848x480, about the resolution of a standard DVD) at this price range. Low light performance is not bad, and would guess the larger 1/2.33" image sensors used in the higher end models fair better.

Improvements:

In motion picture mode, when the maximum 2GB file size has been reached, the firmware should automatically create a new sequenced file with the same settings and continue to shoot. Otherwise, add new 15 fps or time lapsed modes (similar to Canon).

Allow motion picture playback in camera without the associated JPG file. Support more quicktime file formats to let movies edited using a computer playable in the camera.

The camera encodes the movie in Apple Photo - JPEG with variable bit rate, and audio 16-bit Integer (Big Endian), Mono, 16 KHz, 256 kbps. Ideally, if the edited movie can be viewed using Panasonic's own PhotoFunStudio, then it should also be playable in the camera.

After much research, I feel this camera is the best value for its price range considering the quality of the photos and the camera features such as scene selection. I prefer natural light photos rather than photos --which also saves the battery. When my Fuji Finepix F60 died (I think I paid close to $300 for the F60), I searched for a camera that takes high quality low lighting photos. This Panasonic actually takes better low light photos than the F60 (comparable to F10). Menus and control buttons are also more ergonomic and intuitive than both Fuji models. Also much slimmer and lighter. Speed of startup is very good and flash is adequate when I need it.

i just came back from a week long trip to NYC & tested this camera out to the fullest - awesome! its compact, easy to use, takes great pics (even in moving subway), & long battery life; what more could you ask for? oh, great price!

The camera takes good snapshots and has a nice (initial) price point for its performance. But the camera firmware needlessly prevents aftermarket batteries. The official battery is $30-$50, compared to a $10 aftermarket BCF10 battery. So budget a bit more.

I recieved this as a replacement from Panasonic for my dmc-fs5 which went in for spot on the sensor, I was mixed at first because this one was not as wide angle as the 30mm on my fs5 and the body did't seem as well built. After shooting a few pics I soon realized that this one controls noise better and has more accurate focusing.I shoot in Vivid mode and I would suggest it. I will keep this one, very sharp Leica lens (Leica is still the best..period)
I compared shots with this against my canon rebet xt and sigma 18-200mm. The Canon /Sigma combo was not even close
to the resolution and sharpness of this little compact with the tiny sensor. Panasonic hit a homerun. It takes great wide videos as well..Go buy one!

I ordered this camera for my wife who wanted a small camera to take with her. I ordered the Kingston SD4/4GBET (sdhc) memory at time of purchase. I had no problem with the memory, just droped it in and the camera recognised it, It shows over 700 pic's at 10 MP. I was amazed at the colors and quality of pic's. The Intelligent Auto function is great for stability of pic's that are unstable, I even tried this while moving the camera while shooting and the pic's came out clear. This is only my second digital camera, my old camera was a HP and this new one, even cheaper, is going to become our main camera. The HP ate batteries, the Panasonic is still on first charge and only one mark missing on battery indicator after several dozen pic's and lots of playing. I highly recomend this camera.