With its compact, elegant design and enthusiast-friendly feature set, the Panasonic Lumix DMC-LX3 certainly qualifies as the camera you want to carry when you need something more discreet than a dSLR. The replacement for the LX2, the LX3 has an almost identical body design, same-to-better performance, and improved photo quality. Still, to me it comes up a bit short overall compared with its main competitor, the Canon PowerShot G10.
At 9.1 ounces, with dimensions of 4.3 inches wide by 2.5 inches high by 2 inches deep (with lens retracted), the relatively compact LX3 fits comfortably in a jacket pocket. There's a slightly pronounced grip up front and a small, bumpy thumb rest on the back, but neither seems quite enough. I frequently felt as if the camera was going to slip out of my hand; a firmer grip required covering all the buttons below with my thumb. The LX3 can retain its slim design because it lacks an optical viewfinder. Instead, Panasonic offers an external model, the DMW-VF1, which is quite pricey.
On top of the camera sits a hot shoe, a welcome addition that the LX2 lacked, power switch, pop-up flash, focus point selector button, zoom switch, and mode dial. In addition to the PASM, movie capture, and scene modes that were available in its predecessor, plus the update from Auto to Panasonic's Intelligent Auto mode, the dial includes two slots for custom settings. Though there are only two slots, the camera can store four groups of settings; one set gets slotted in C1, while C2 stores three. This is an interesting approach that leaves one preset instantly accessible, while switching among the others requires a trip into the menus.
You can manually toggle among aspect ratios via a switch atop the lens, while the switch for the AF, AF macro, and MF modes lives on the left side of the lens. Unfortunately, the manual switch for the aspect ratio makes choosing the HD movie capture mode (up to 1,280x720 at 30fps) a bit cumbersome: when the switch is set to 4:3, HD movies aren't an option. And since the non-4:3 aspect modes are all crops below full resolution, I really don't suggest using them unless you know you'll never need the parts of the photo you're throwing away.
The rest of the controls sit adjacent to the bright, saturated wide-aspect 3-inch LCD on the camera back. Though small, the buttons, switches, and joystick are easy to feel and manipulate unless you have really big fingers. Panasonic added an AF/AE lock button over the LX2, but otherwise the layout (though not the feel) is identical. In addition, there's a capture/playback switch, Quick Menu button/joystick, display, and burst shooting buttons. I really like the joystick, but as a button it's not responsive enough; it requires multiple presses to register and pull up the menu. The four-button navigation pad that surrounds the Menu button has dedicated buttons for the self-timer, flash, and exposure compensation. The fourth button is a user-programmable function button, which you can set to quick review, film mode, ISO sensitivity, white balance, metering, AF mode, or intelligent exposure. Film mode provides a variety of preset combinations of contrast, sharpness, saturation, and noise reduction settings, and you can save two custom sets. There's also a Multi Film mode, which saves three variations of a single photo with the three user-selected film settings.
Some other notable capabilities of the LX3 include Pre AF, which locks focus when it senses the camera's at its steadiest, and selectable grouped AF points. The camera offers all the essentials, including optical image stabilization, as well. Normally I'd refer you to a downloadable manual at this point, but Panasonic doesn't have the LX3 documentation posted on its Web site. (And the printed docs don't have an index, a personal pet peeve.)
I don't understand why products in this class remain so slow; even landscapes can change if it takes long enough. Plus, the LX3 has fewer pixels to process than the G10, so I'd expect it to be faster than it is. It wakes up and shoots in just under 2 seconds, which is reasonable. But 0.6 second to focus and shoot under optimal conditions is less so, and 1.1 seconds for low-contrast scenes is a bit too high for the price. Its 1.9 seconds shot-to-shot performance is better than the G10's, but most snapshot cameras do better than both. With flash it slows to about 2.5 seconds between shots, which is typical, if not terrific. For burst shooting it manages about 1.9fps.