Panasonic Lumix DMC-FZ8K (black)

Pros: Leica lens, Image Stabilization, little to no distortion, great exposure and colors

Cons: noise at ISO over 200, NR too strong

Summary: I've owned a Canon S2 which I sold beause the images were soft and overly processed. I soon purchased a Nikon D50 with an 18-200mm VR lens. I love this combo, but its heavy and cumbersome. So, I purchased a Panasonic FZ8 as a backup and for times when I just don't care to carry my Nikon D50.
Let me say that the FZ8 will exceed you photography expectations as long as you understand and accept its limitations. The Leica lens will yield sharp, vibrant colors but you'll lose all the benefits with higher noise and excessive Noise Reduction. The remedy is to shoot at ISO 100 whenever possible and keep the NR to low. This will give you sharp pictures. If you need more light then use a tripod or Gorillapod(portable tripod) and you will have great images. When it really matters shoot RAW..yes this little camera process RAW and the imaging software is fantastic. If you can live with these limitations then I would encourage you to buy the Panasonic FZ8.