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Though I owned a pretty good Panasonic video camera in the past, Panasonic's name never associated in my mind with quality photo cameras, but I'm happy I've been proven wrong. I did quite serious research in various DSLRs, 4/3rds, mirror-less APS-C cameras, and ended up choosing G3. It's not the best camera in the world, every camera has its own trade-offs, it's just the most satisfactory camera for my needs for the money I was willing to spend. Your mileage may vary.
First of all, I would recommend to anybody considering buying this (or any other) camera do three things:
-Read professional reviews on dpreview dot com, it's important to see the objective tests and read professional opinion. But don't make final decision based on professional reviews. What reviewers achieved in controlled environment, putting their best efforts, may not be representative of what you get. In fact most cameras look in reviews much better than in reality.
-Check the average Joe the photographer pictures on pbase, flickr, etc. See how punishing or forgiving the camera is, compare to other cameras. I find the pictures of water especially revealing. Does the water look dark, muddy, blotchy with visible noise, or pleasantly smooth, even oily? I found many G3 water images very pleasing. It's possible for a camera to produce outstanding results in controlled environment and yet fare much poorer in casual use.
-If possible, handle the camera in the store. See whether you like the weight and size, how soft/hard the release button is, whether you like the viewfinder, are dials/buttons readable, how quickly it focuses, etc. When I was trying to decide between Panasonic DMC-G3 and Sony NEX-5N, I found the first was a lot more comfortable in my hands, and I immediately noticed that Sony was hunting trying to focus in low light situation, while Panasonic locked focus quickly and silently. The small stuff like that may make a superb otherwise camera a source of annoyance, so try it before buying.
I don't want to repeat technical reviews, which you can easily find on the web, rather mention pros and cons of this camera in my subjective opinion.
Pros:
* Perfect size and weight. This camera feels very comfortable in my hands and is easy to carry around. I have a Canon DSLR also and find it too heavy, too cumbersome to carry, especially with large lenses.
Most pictures require little or no post-processing in normal settings. Colors are pleasing, well saturated, contrast is perfect, default sharpening is just right. Jpeg images are acceptable for web use, raw images look much better in print, especially when shooting landscapes. Though I think the colors are close to reality, I wouldn't vouch for that and frankly I don't care. I'm not a forensic photographer, it's more important to me if the colors are pleasing to look at and bring up memories of the event. So when I hear from Canon DSLR users about their plasticky dull colors that they are very real, I can't care less if it's true or not. I know that bringing up pleasing vibrancy in Canon images isn't easy and often impossible. After using Canon DSLRs for almost ten years I feel a lot happier with Panasonic images.
* Autofocus is very quick and absolutely silent.
* Manual focusing with three mode magnifier works great. Since the picture you see in the viewfinder comes from the sensor, what you see is what you get. No front or back-focusing problems, with any lenses, which is a common problem even with expensive DSLRs. Additionally, auto+manual focusing mode is an absolute gem. I keep camera always in this mode. If you don't have an opportunity to manually focus, do nothing, camera will focus automatically; if you do want to focus manually, touch the focus ring and camera will assist you.
* I like the fact that flash is built in, and not a flimsy attachment, like in other cameras. It's quick to charge and always at hand, which is great because you never know when you might need it.
* An electronic viewfinder is also a very good idea, in most cases it's more convenient than LCD. It's not as good in low light as optical viewfinder, but it shows more useful information and has additional functionality that optical viewfinders don't have, like manual focus assist.
* Swiveling touchscreen LCD is also pretty handy. It makes it very easy to shoot from any position. I also like the fact that you can touch the screen to select the focus area and camera starts tracking it.
* Good sensor resolution and more importantly high spatial frequency contrast produces well defined images. Pixel peeping folks should be satisfied. Full-size images look spectacular on large screen monitors. Enlargements are pretty easy too, 11x14 can be viewed from any distance without pixelization or loss of sharpness. I also printed 20x30 and they look sharp from 2 feet or more.
* Video looks very good to me, though I haven't used it much.
* If you have a Panasonic large-screen TV, then pop the SD card straight from the camera in to TV SD slot and select Viera tools and you can watch videos or slide shows without any additional processing.
Cons:
* Buttons on the right side could have been designed better. I frequently inadvertently press some of them with the thumb.
* Buttons take time to get used to and remember how to set what you want. It's frustrating to scroll through pages of menus trying to locate stuff.
* Low light, low contrast focusing can be imprecise, but this is a common problem of contrast focusing cameras.
* High ISO pictures aren't particularly bad, but noise and blurriness become visible even on modestly large prints. It's not bad for web, but for large prints one should keep ISO under 200.
* Battery is weak, good for only 270 pictures.
* The choice of lenses is not big and they are quite expensive.
* No Photoshop included! Instead you get a Silkypix software. It misses many useful Photoshop features, though it does have the essentials, but it's also a useability disaster. The program is so backwardly designed, it looks like it was created in 1980's.
Finally, a few recommendations from personal experience. Shooting in RAW reveals more small detail and more importantly preserves better tonal transitions in landscape photos, so they look a lot better, I would recommend using RAW for those pictures for any size prints. To produce sharp, detailed pictures for large prints, you should keep ISO low, shutter speed shorter than 1/2f 1/4f, or better yet use a tripod. Test your abilities to hold the camera steady, take pictures hand-held and with tripod and compare them on pixel level to see how much your hands are shaking. Every lens has its sweet spots where it shows best sharpness and contrast. You can find MTF charts for many lenses on the web. Many lenses have the best performance around F8. It also makes sense to use manual focus when feasible. Again, compare manual focusing with autofocus in various light condition to see when to use what. Taking pictures with telephoto 200-300 mm lens can be challenging. When you close the aperture down to F8, and set shutter to at least 1/1000, and ISO to 160, you can shoot only in a very bright sunny day. Therefore, a tripod when using telephoto lenses is virtually always a necessity. Also if you have difficulty manually focusing because your hands are shaking, you aren't likely to get sharp pictures. Get some practice on a gun range, familiarize yourself with shooting breathing techniques, take a half breath, let some out, hold it, steady your hands, push the trigger slowly. Many people blame a camera or lens for their blurry pictures, while the real reason is shaking hands, or poor focusing, or high ISO.
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