I have to get on the bandwagon here. This is a superb little camera, definately five stars! I also have the TZ1, which showed promise, but has limitations. In my review of the TZ1, I noted it had lots of "noise" and pictures shouldn't be printed much beyond 4x6 inches if they were to be sharp. I also wanted more manual controls.
The TZ3 fixes and improves almost everything about the TZ1 and adds some new, very useful features. The noise has been drastically reduced, the lens is better, the sensor is bigger, and the processor is not only faster, but produces better pictures. The TZ3 adds a very handy "function" button - or I should say function capability - the number of buttons is the same - which gives immediate access to five or so "most used" settings without having to go into the menues - of which there are several.