I was looking to upgrade my ultra-compact Pentax Optio S6, which was an okay camera, but simply 2½ years old and falling behind the curve.
I prioritized getting a compact, if not ultra-compact, form factor, good zoom and a nice screen - and so after much research I chose the Panasonic Lumiz TZ5, which has all of the above, and even include the ability to record video in 720p HD.
And I must say that for a relatively compact travel cam, the TZ5 isn't too shabby. I love the 10x optical zoom, the large, sharp and brilliant 460K 3-inch TFT, and the Intelligent Auto mode is pretty good at guessing what I want to shoot.
However, a few cautious words:
The autofocus sometimes has to hunt quite a bit, especially at high zooms.
A lot of images are rather soft - actually very soft in low light situations.
The video quality isn't all that spectacular in real life, and the audio is quite noisy.
So - if I hadn't been stupid and thrown out all the packaging, I might consider returning it and go for the Canon G9 instead. It's larger and somewhat heavier, but has more manual control, higher quality images and a beautiful video mode. Or possibly just go ultra-compact again with an Ixus or the Fujufilm f50fd or something.
That said, I'm fairly sure I'll be happy with the TZ5's features and the fact that it is very easy and quick to use, as well as the above mentioned factors - and you could, too - I just want to make sure you've thought it all through, pros and cons alike...