Though the GF1's JPEG images show Panasonic's characteristic blue-channel compression problems--which appear as yellow blotches and streaks--it's far better than I've seen in other models, and doesn't become overt until about ISO 400. (Even if you don't notice it at lower ISO sensitivities, it might become a problem when you start playing with the tonal range. Shoot raw if you plan to retouch.) Color noise appears at ISO 400, with detail smearing becoming a problem by ISO 800. As ever, though, this depends upon your scene content and lighting conditions.
For its class, the GF1 can produce some pretty good ISO 1,600 shots, especially in conjunction with the fast 20mm lens. If you shoot raw, you can probably get even better noise-reduction results.
(1/80 sec, f1.8, 20mm lens, ISO 1,600, multi metering)
The 20mm lens produces very natural-looking detail. This photo has a bit of magenta fringing on the closer petals, but it's unusual for both of the Panasonic lenses I tested.
(1/250 sec, f1.7, ISO 100, AWB, multi meter, 20mm lens)
Except for very challenging, high-contrast lighting, the GF1 renders very good, even exposures. The camera does seem to err on the side of overexposure, however, clipping some highlights in order to bring out shadow detail; you can easily compensate for this, though.
(1/80 sec, f2.2, ISO 100, multi metering, AWB, 20mm lens)
Panasonic performs distortion control in camera, and does a pretty good job of straightening out curves, though as you can see there's still a bit of squeezing on the left side.
(1/80 sec, f7.1, ISO 100, multi metering, AWB, 14-45mm lens at 14mm)