The TS4's photo quality is like that of a lot of point-and-shoots: good with a lot of light, but with a noticeable drop in quality in low-light conditions.
Below ISO 400 you'll get very good results with nice color and decent detail. Its main sticking point is with softness; photos -- and video -- never look really sharp straight from the camera. Add in increased softness from noise reduction at higher ISO sensitivities and you may not want to view or print your results at larger sizes. On the upside, the TS4 handles noise better than its predecessor in low light.
Basically, don't expect to be able to take this 30 feet underwater without additional lighting and be able to make huge prints of what you capture. It's more likely you'll end up with good photos that you can share online. In shallower waters, such as with snorkeling or in a pool, you'll get better results, though you probably won't have a lot of fine detail when viewed at 100 percent. As a pocket camera to take along with you to the beach, hiking in the woods, or flying down the slopes, it's a solid option.
Color is very good, but again, it depends on the ISO sensitivity you're shooting at. With plenty of light you get bright, vibrant results. At ISO sensitivities above ISO 400, colors start to look slightly washed out. Exposure is generally good, too, though like many point-and-shoots, highlights will blow out.
Panasonic improved its Intelligent Zoom feature for the TS4, which gives you a digital zoom up to 9.3x without a significant loss of photo quality at small sizes (top). However, at full screen size, the results aren't good (bottom), but that goes for all cameras with similar features.