In addition to the standard PASM and scene modes, the LX3 includes two slots on the mode dial for custom settings. The camera also provides Panasonic's Intelligent Auto mode, which performs automatic scene recognition and optimizes stabilization, ISO sensitivity, AF mode, exposure, and red-eye settings. Pressing the focus button doesn't put you in manual focus mode, as you might expect (OK, as I expected); it puts you in the mode to select your focus point(s). In one of its nicer touches, the LX3 lets you select from a variety of grouped focus points, such as the top row or left four.
Unless you have a specific target aspect ratio for your final photo and don't plan on using the photo for anything else, I'd stay away from using the switch and crop the photos in software. The native aspect ratio of the sensor is 4:3, and anything else is simply a lower-resolution crop.
The controls are easy to feel and comfortable to use, but the etched labels on the navigation buttons are hard to discern in low light. I also found the Quick Menu joystick fairly nonresponsive at pulling up the menu; it usually took multiple presses to do so.