Compared with a typical point-and-shoot, the XF1's slightly bigger sensor buys you some extra flexibility when it comes to using ISO sensitivities above ISO 200. Subjects do lose detail and there are more artifacts visible when photos are viewed at full size, but it isn't until ISO 1600 that things look significantly softer at larger sizes.
On the upside, if you can take advantage of the f1.8 aperture, you can shoot with less light without immediately needing to use higher ISO settings. You can also get better low-light results using modes that take advantage of the EXR sensor technologies, but they are, for the most part, automatic modes.
Colors are bright, vivid, and pleasing, but even in the camera's Standard color mode subjects look oversaturated. It may take a lot of adjusting of settings, shooting in raw (SilkyPix software is included for working with the RAF file format, but Adobe Camera Raw supports the XF1), or experimenting with its EXR modes to get the best results. If that's not something you're willing to do, this probably isn't a good choice. Its EXR Auto mode is very good as autoshooting modes go, but even tweaking that mode's settings can get you better shots.
Colors are bright, vivid, and pleasing, but even in the camera's Standard color mode subjects look oversaturated. If you don't like the colors straight from the camera, you can get better results shooting in raw (SilkyPix software is included for working with the RAF file format, but Adobe Camera Raw supports the XF1).