From the website: "Sensor: 1/2.35 " Type CCD" - whatever that means...

Generally, the bigger the sensor, the less image noise. Unfortunately, the bigger the sensor the bigger the camera in most cases.
The Fuji has a 1/1.7 inch sensor, so it is bigger than the Panasonic 1/2.35 inch sensor.

Lan (or anyone who has used the Fuji):
I'm also thinking of buying the Fuji F31fd.
I like taking night pics (ie long exposures), but I can't work out from the DPreview review if it has manual mode or not. Can you manually set the shutter speed?
Does it have a standard size tripod mojnt on the bottom?
Ok I can see it now - there's a difference.
However I'm not talking about using it as the only camera - it's meant to compliment the other one. You must admit the zoom is amazing & the 28mm angle is fab. It felt really good to play with & daytime pics were fab.
Having said that of course I want all pictures to be good. So how often is higher ISO needed? What would be the effect of setting it to not go higher than 200?

Excellent discussion. Show me a camera that;s one that's more shear fun to use than a TZ3 and I'll buy it. The other day I was shooting at 280mm @ISO 100 and 1/30 sec, spot focused on a butterfly at 2m distance, then shooting macro in 6x9 wide angle at 25-26mm effective (in wide angle mode), with flowers in the foreground and windmill in the back. The Leica lens rendered images crisp at both edge and center. Discovering this kind of capability in a pocketable camera was near to a revelation.

Stick the TZ3 lens on the LX1 body with a Fuji sensor and we'd finally all be happy... haha...
Cheers,
Terry