Decent small point-and-shoot with great lens
Great optical zoom range, image stabilizer, fast response, easy controls, 3:2 and 16:9 aspect settings
Slow flash recycle, noise at higher ISO, lack of manual controls
The Bottom Line:
Worth a look for a great lens and optical stabilization.
The Panasonic DMZ-LZ3 is the fourth Digital Camera I have owned. I started life with a 1MP Canon A-Series, moved up to a Canon Powershot S30 3MP unit, and in 2002 purchased a Fuji S602. The S602 completely replaced my 35mm SLR unit and has been my camera of choice since 2002 and some 4,000 photos.
However, it is a larger camera and has some shortcomings such as a lack of a focus lamp, high power usage, and is geared toward a more advanced photographer. While this is fine for my use, the weight and complexity made it not the ideal camera for all situations.
So, I decided at the start of the new year to look for a second smaller digital camera to supplement my Fuji S602. I wanted at least 5MP, a good lens with decent speed and optical zoom, and the ability to store to an SD card since I have several large SD cards for my PDAs in my inventory. The other requirement was to have a focus lamp and to use "AA" batteries. I would prefer to have optical stabilization as well.
I usually recommend to people the Canon Powershot A series since it delivers wonderful photos, uses "AA" batteries, and has the ability to go from fully automatic to fully manual. However, after doing some looking around, I found the Panasonic DMC-LZ3. It appealed to me because it has a relatively fast (f/2.8-4.5) lens with 6x optical zoom, which is a 35mm equivalent of 37mm to 222mm. Having a large zoom on a small camera always introduces the propensity to have shaky images at the long end of the zoom, so Panasonic also includes MEGA O.I.S. optical image stabilization to help compensate for this.
The DMC-LZ3 does not have an optical viewfinder; with such a large zoom it wouldn't make sense on such a small camera. So, the only way to frame your photos is to use the 2" diagonal color LCD screen. Most people will find this is a decent screen size for most shots.
The navigation on the menus is very straightforward, and for the most part I was able to figure out the settings without reading the manual.
The camera also includes about 14MB of built-in storage, which is handy when you fill up a memory card. This can hold about 5 pictures or so on the maximum resolution setting. I would recommend purchasing the largest memory card you can afford. Panasonic states that SD cards up to 2GB may be used. I have effectively used two 1GB Cards (1 of which was a high speed Sandisk Ultra II) and a 512MB card. A 1GB card should afford you around 390 pictures at maximum resolution.
The item that sets this camera apart from a lot of other point-and-shoots is the lens system. As I mentioned before, it is a 6x optical zoom lens with image stabilization. The Panasonic's system is a true optical stabilization system, not an electronic only one like some cameras have. This will help greatly with taking pictures at maximum zoom or at lower shutter speeds. The lens is relatively fast as well, with a maximum f/2.8 at the lowest zoom, and f4.5 at the highest zoom. This helps bring more light into the lens in low light situations.
The DMC-LZ3 also includes a focus lamp. This is an improvement over the DMZ-LZ2 from 2005. This allows focusing on difficult subjects or in lower light much easier than no light. I find this a huge item, as my Fuji S602 doesn't have one and it's difficult to focus on my black cat or in lower light without one. The focus lamp can be turned off as well if there's a situation which you wouldn't need it. Unfortunately, there is no manual focus control, but the target audience for this camera shouldn't mind.
The flash is as expected for this type of camera, with a range of 1.6 to 13.8 feet on the auto ISO setting; ISO 100 has a range of 1.6 to 6.9 feet. The flash does take a long time to cycle between shots, and unfortunately the LCD isn't usable while the flash recharges. This makes it difficult to frame another shot while it cycles.
There is a movie mode which can let you shoot 640x480 video at 30fps, which is a very nice mode, but you'll have to get the DMC-LZ5 to get movies with sound. Panasonic recommends a high speed SD card for this type of shooting, and based on my experiences with my S602 which shoots the same speed WITH sound, I can't disagree there.
In the five days I've had the camera, I've shot around 200 pictures and thequality is decent for this type of camera, especially in brighter light. If you do a fair amount of shooting outdoors, you should not be disappointed at all. Indoor shots suffer a bit from noise when higher ISO settings are used, but I didn't find them too unpleasant as long as the "natural" or "standard" settings are selected in the picture enhancement menu. The "vivid" setting is too sharp and should be avoided in my opinion.
I also noticed that in lower light at maximum zoom that the auto focus system sometimes gets confused and doesn't focus correctly.
The overall response time of the camera is excellent. There is very minimal shutter lag, and focusing is responsive. It's on-par with my Fuji in terms of lag and is faster in terms of focusing. Both are improved over the older Canons I used significantly.
One of the nicest features of the DMC-LZ3 is the multiple aspect ratios it includes. It includes the standard 4:3 ratio that almost all digital cameras use by default, which is perfect for most shots and wallpaper on a computer that doesn't have a widescreen display. However, it can sometimes lead to difficulty with cropping when pictures are printed in the standard 4x6 snapshot size. So, to help with this, there is a 3:2 aspect ratio mode which allows one to shoot the same ratio as a 35mm film size. This is very useful if you are planning on making a lot of 4x6 prints. There is also a 16:9 mode which matches the aspect ratio of newer widescreen TV's and can fit most widescreen computer displays. I used this effectively to make some shots of sunrises for wallpaper on my laptop which has a wide screen.
Another nice feature is the "auto rotate" for portrait (vertical) shots when they're being reviewed. The camera is able to determine whether it is being held vertically or horizontally and will display the picture appropriately. This makes it much easier to review portrait photos after the picture's been taken.
The Panasonic mounts to your computer as a standard USB mass storage device, so you can access it as a drive letter. It does only have a USB 1.1 interface, which is pretty slow especially for 5MP pictures. I'd recommend you get a USB 2.0 SD Card reader.
More advanced photographers will appreciate the ability to adjust the exposure settings as well as the auto-bracketing function. There isn't a setting for shutter or aperture priority, but most people won't miss it. The biggest miss is a lack of a manual focus in my opinion.
The camera takes standard "AA" batteries and can also accept the "longer life" oxyride batteries from Panasonic or NiMH rechargables. I recommend you buy a set of NiMH rechargables and a charger. You'll save a lot of money in the long run.
I think that most people looking for a first digital camera or looking to upgrade a point-and-shoot from a few years ago will be very happy with this model. For about $50 dollars more, you can get the 6MP LZ5 model which has a larger screen and movies with sound as well as more resolution.