The GX1 has a great, shooter-friendly design and interface, but the new X-series lens isn't one-size-fits-all.
With the 14-42mm Power Zoom lens retracted, the GX1 is comfortably compact, though still not pocketable. For the intended user, though, I think it's a very good size: small enough to be relatively unobtrusive for street or vacation photography, but big enough that you feel there's something to hang onto and (for the most part) fumble-free controls.
I have really mixed feelings about the new PZ lenses. On the plus side, they automatically retract when you power off the camera, and they support quiet continuous autofocus during movie capture. But the placement of the zoom switch only feels comfortable if you're shooting with a viewfinder. The manual focus switch sits below it, and I frequently found my thumb falling on that when I was trying to zoom. And I don't really like the switch for manual focusing; it's really just for occasional use, and has neither the precision nor the fluidity of a manual focus ring.
The GX1 has the typical Panasonic control layout. I generally like the user interface, which allows you to use either the touch screen or buttons, but the silver-on-silver etched button labels are impossible to see, especially in dim light. Some of the recessed buttons, like Display, AF/MF, and direct record (on top), are also a bit hard to press.