Good Feature set and lens ruined by noise issues

The Lumix LZ7 is relatively easy to use with a dial on top to select different modes and the user manual is straight forward, the 'normal picture mode' lets you set exposure compensation and can display a live histogram along with a grid to help compose and take straight pictures, these are very useful features that not all P&S cameras have. The camera has optical image stabilization which works pretty well even at the max optical zoom of 6x to prevent blurry pictures, the downside is that most pictures, even those taken at ISO 100 (the lowest setting the camera allows) are grainy and somewhat noisy, even those taken in daylight outside, this is because the in camera venus III noise reduction combined with the in camera sharpening produces a mottled artifact effect that is noticed more if you zoom into the pictures. The user manual advises setting color mode to 'natural' rather than 'standard' to help reduce noise in photos in low light conditions, although it is still visible to some extent. Panasonic could have probably avoided the noise more by fitting a larger CCD sensor, such as 1/1.8" instead of 1/2.5 "

The mode called scene mode let you select various scene modes (landscape, party, sunset, beach etc) that probably work pretty well but the high sensitivity mode (3200 ISO) that is tucked away in scene mode is clearly a scam since the pictures are mostly unusable because of noise.

'intellgent Iso mode' is interesting because in that mode the camera adjusts the ISO based on the movement of the subject and light conditions, although the higher you go the more noise is present, some pictures in low light are actually turn out quite good, others not so good

the movie mode is pretty decent and it can record in 16:9 (widescreen) @ 848 x 480 in quicktime format and it uses optical image stabilization, the quality of the movies are good however the camera has no speaker for playback so you can only hear sound after transferring to a PC, you cannot adjust the zoom factor once you start recording, only before

I also noticed that the flash did not fire in some occasions indoors when it should have because of low lighting

There is also no way to enable RAW mode on this camera unlike some other P&S digitals