Let me start by saying that I did quite a bit of research before I bought this camera. Prior to buying the Panny ZS3, my other digital camera buys had all been been Canons (Rebel XT and XTi, various lenses/flashes, and a Powershot SD700IS Elph -- all fine digital cameras). My background: I'm a retired/recovered lawyer, who now runs a small web/print/"new media"design and technology consulting shop for other small businesses. I'm a reasonably competent (largely self-taught, not a true expert) Adobe Photoshop, Premiere Pro, and After Effects CS4 (Windows) user. I also consider myself a semi-advanced amateur photographer (but who doesn't?).
The motivation for making this purchase is that I succumbed to my adult daughter's admiration (and constant use) of my Canon SD700IS and finally I just gave it to her. My wife would undoubtedly say that I engineered the whole thing so that I could buy a new, more advanced point and shoot with a longer zoom and better video quality/capability and that giving the SD700IS to our daughter was simply a vehicle for assuaging my own guilt about spending the money and getting her (my wife of 30+ years) to approve the transaction. Can you believe that anybody could be that cynical?
To me, the camera is a little gem of compact, useful technology/engineering. The fit and finish are very nice (the equivalent of the SD700IS). I have not encountered the "too loose" problem with the mode-selection knob/wheel that others have mentioned; however, I bought a "recent shipment" model from a well-known, reputable photo equipment reseller (BH), which may account for the improved fit/action of that item. I am a long-time, reasonably loyal Amazon buyer, but I was able to get a better price from the other vendor at the particular time I was ready to buy.
The 25-300mm (35mm equivalent) 12x Leica zoom lens is just amazing for such a compact form. Subjectively, it's great little piece of glass that, coupled with effective auto-focus, consistently produces very sharp, well-exposed images with surprisingly little distortion for a such a compact, wide-tele zoom lens (there are always trade-offs). There's a nice review of the camera and lens at DigitalCameraReview, which you may find helpful. As noted by others, the camera lacks manual shutter-speed and aperture settings/control; however, in the "Normal" mode, you are able to manipulate various parameters of the camera's automatic functions, which I thought were fairly useful/intelligent. The no-brainer iA (intelligent Auto) mode seems quite effective as a fully automatic shooting mode, but I'll leave the full assessment of that to others who have used that mode under more/different conditions than I. If you like scene-oriented automation, other modes provide a veritable s**tload of scene models to choose from. The camera has a macro capability and other goodies too numerous to get into here.
The 1280x720 HD video capabilities of this compact camera are almost sure to bring a smile to your face. Although, certainly not the equivalent of a dedicated, high-end consumer video camera like the Canon Vixia HFS100, the ZS3 produces sharp 720p HD videos with surprisingly good color balance and stereo sound (for such a compact camera). Trust me, you won't be embarrassed to put your ZS3-HD videos up on YT or on a widescreen dvd. There's been much discussion about the compatibility of the AVCHD-Lite video recording format with various editing packages. I can speak from first-hand experience that Adobe Premiere Pro CS4 (with the 4.1 update installed) WILL edit the AVCHD-Lite format natively. The non-RAM preview function is a little choppy (even on a pretty powerful computer), but the Premiere Pro editing function is more than serviceable and produces nice, smooth results at AVCHD 30fps/progressive sequence settings and comparable h.264/.mp4 output. I haven't tried the other available AVCHD settings/outputs, so I can't comment on them at this point. My understanding is that Sony Vegas Pro 9, too, natively handles the AVCHD-Lite format (others may as well). If your software doesn't handle that format natively, take a look at VoltaicHD by ShedWorx and/or HandBrake (open source), which claim to convert AVCHD-Lite files (the .mts files located in the AVCHD>BDMV>STREAM folder) to other, more editing-friendly formats. I can't comment on the included Panasonic software, because I haven't installed/used it. Also, there is a camera firmware update (ver 1.2) currently available at Panasonic's update site, which, apparently, prevents non-compliant batteries from being used in the camera.
Wish-list: a little faster zoom and focusing speed while shooting video (I'm not sure, but at this time the ZS3 may be the only compact point&shoot/HD camera that zooms/focuses while shooting HD video). More manual controls would be nice (not a deal-killer by any means). The battery life (subjectively) doesn't seem all that fantastic, although DigitalCameraReview places it in the top-tier of comparable battery-camera combinations. All-in-all, this is a very nicely made, super-zoom, compact p&s camera that produces great images and surprisingly good HD video that, taken together, seem well worth the purchase price.
UPDATE: Thanks to commentator, Matt Eye, for pointing out that the Samsung HZ10W and HZ15W, like the ZS3, also allow zooming (and presumably focusing) on the fly while while shooting video.
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