The FZ35 definitely has better image quality and a superior noise profile than its predecessor, the FZ28. That said, JPEG compression artifacts appear at all ISO sensitivities and noise-suppression artifacts--yellow splotches from poor blue-channel post-processing--start appearing as low as ISO 100 and become quite noticeable by ISO 200. At ISO 400 photos look seriously overprocessed.
Shooting raw+JPEG can be frustrating because the FZ35 drops to standard-quality JPEG compression in that mode. That results in unsightly artifacts like the mottled appearance you see in the top shot here, which doesn't appear in the simultaneously shot raw file.
(1/100 sec, f4, ISO 80, pattern metering, AWB, 27mm equivalent; raw processed using Adobe Camera Raw defaults)
Though it's not nearly as bad as the standard-quality compression, you can see some of the blotchy JPEG artifacts even in the best-quality JPEG shots. Also note the magenta fringing on the edges of some of the petals. When printed at 12x16, however, I didn't t really see the compression problems, though the fringing was still noticeable.(1/80 sec, f5.6, ISO 80, pattern metering, AWB, 232mm equivalent)
Shooting JPEG+raw is too slow to be practical for wildlife, so you're stuck with JPEG. Unfortunately, the JPEG compression artifacts exacerbate whatever image noise there may be, even as low as ISO 200. Also note the purple fringing around the eye.
(1/125 sec, f4.4, center-weighted metering, ISO 200, AWB, 486mm equivalent. Though it might look zoomed beyond 100 percent, this is actually a 1:1 crop.)
While the FZ35 maintains nice color saturation at midrange ISO sensitivities and relatively good sharpness, you can see some of the smeariness and color streakiness in the blue channel (the yellow blotches) caused by noise suppression. (1/40 sec, f3.2, ISO 800, center-weighted metering, AWB, 53mm equivalent)
Because Panasonic performs automatic distortion control in camera, the FZ35 delivers relatively undistorted results at its widest angle. (27mm equivalent; photo rotated slightly to correct for off-angle shot)
Like many consumer cameras, Panasonic's sharpness settings seem to be optimized to go straight to print; you can dial it back if you like a more natural, less crunchy look. As with its competitors, the FZ35 is at its sharpest in macro mode, at the center of the lens. There's a tiny bit of distortion/focus fall off around the edges, but not too bad for its class.
(1/80 sec, f3.6, ISO 80, pattern metering, AWB, 101mm equivalent)
The FZ35's color is surprisingly accurate, pleasing and saturated. (Note: with all photo samples, everywhere, unless you have a calibrated monitor, the colors will not display accurately. In that case, just consider this slide eye candy.)