The camera's pictures looked good and were almost completely free of lens distortion. This greatly impressed us, as most ultrazoom lenses--especially those with 28mm-equivalent wide-angles--tend to heavily distort images at their extreme settings. Fuzzy artifacts obscured certain finer points, but photos were otherwise colorful and detailed. Noise was evident, even at the camera's lowest sensitivity of ISO 100, but the Panasonic keeps it well under control through ISO 400, where the amount of finer detail in our images diminished further. Even at ISO 800, the DMC-TZ3 produces usable images, though fine detail and shadow detail decrease slightly compared to those taken at ISO 400. The noise turned into a sea of static at ISO 1,250, taking away most fine detail and shadow detail, though you should still be able to eke out a usable 4x6-inch print. Of course, it's best to stick with lower ISOs whenever possible.
The Panasonic Lumix DMC-TZ3 puts a lot of lens into a small package. The wide-angle, high-zoom camera performs well and takes acceptable shots, though it's hardly perfect. Its higher resolution, wider lens, and larger screen make it better than its predecessor in nearly all categories. Unfortunately, it misses one of the TZ1's most fun shooting modes, and it keeps some minor image issues that, while improved over the TZ1, still cause problems. All that said, the DMC-TZ3 offers a lot of value for the money and easily trumps most other super zooms on size.
(Shorter bars indicate better performance)
(Longer bars indicate better performance)