After three hours of shooting, here's my tentative take on the Panasonic Lumix DMC-FX35:
- small, light; easy to keep in your pocket at all times
- zoom range is just about ideal for me
- reasonably priced (300 USD)
- takes decent-quality 1280x720/30fps movies
- intuitive, responsive controls never get in the way of taking a shot
- in-camera processing generally gets it right (although see below)
- lots of metal, including metal tripod socket
- continuous shooting just as fast as my Digital Rebel; plus it has a 2.5-mpix 6 fps mode, and a 0.9-mpix 30 fps mode (i.e., 720p movies)
- Even on the Natural setting, photos have a processed look and little latitude for post-processing; raw image quality (which we have to guess at) must be mediocre at best.
- Noise reduction wipes out all low-contrast detail even at ISO 100 in good light.
- Even high-contrast detail is not anywhere near what ten megapixels should offer.
- Sound in movie mode is poor even indoors.
- Auto WB is slightly off both indoors and out.
- Auto exposure is a bit unpredictable in backlit situations.
- Extreme corners at 4.4mm are blurry. Using 3:2 aspect crops all of the badness out.
In summary, it's a great little camera with a sensor that is poor even compared to its tiny-dimensioned peers. If convenience and ease-of-use are very important to you, my first impression is that the FX35 is at least a match for the excellent Canon SD870 IS. If you care a lot about image quality, a Canon SD870 IS or Fujifilm F100fd would probably serve you better.
Unfortunately, both are about equally important to me in this class of camera, so while I doubt I'll be returning this camera, it's not clear to me that it was a better choice than the Canon SD870 IS. Time will tell whether or not the features make up for image quality.
P.S. For you geeks out there, Panasonic lists the camera's power consumption in the manual: 1.5W in recording, 0.8W in playback. Considering how much data it's processing, that's impressive.