I have had SLR's (film and digital) since 1972. I bought my GF1 about 6 months ago and I have just now sold my DSLR and all its lenses and accessories. I won't pretend that the GF1 can do *everything* a DSLR can, but no matter, I can't put the GF1 down.
I don't use the scene settings, just the Manual, Aperture priority and Shutter priority settings. Picture quality is very very good and the various controls give you a choice of jpeg rendering (saturation, sharpness, contrast, 4 kinds of b&w, etc etc) which can be used immediately. I record the raw files as well for large print needs, but I suspect I could do without.
I bought the GF1 with the 14-45mm zoom, a good quality lens, not very fast but then it is stabilised and the GF1 handles higher ISO's well. A good generalist lens, though obviously not a sports/wildlife combo.
I have just purchased an Olympus Zuiko 9-18mm super wide angle which I love; again it's a bit slow but that doesn't matter so much. I chose this over the Panasonic 7-14 primarily for cost reasons: the Zuiko cost me about 600, the Panasonic is well over 1,000. The size and quality of the Zuiko match the GF1 very well and the 9mm (18mm equivalent) is wide enough for me... Up to your purse and your need to go down to 7mm.
I have now ordered the electronic viewfinder. At first I thought I couldn't live without one, but have enjoyed the experience of using the screen; I will continue to use the screen for most shots, but there are instances where a viewfinder is better.
I haven't found any downsides from a photographic point of view; this is a system camera and a good one.
I do think Panasonic have gone overboard with prices of certain accessories, in particular the batteries, mains adapter and the (wired) remote, all of which will bring tears to your eyes. Other than that, you won't regret buying a GF1