Do not write of the LX5 yet

I have also owned both the 3 and the 5. Both are terrific little machines. The base iso jpeg-files from the 3 was definitely better than the jpegs from the 5, and the lens was sharper in the extreme wide and tele ends. (Apart from the base iso's none of them produces good jpegs due to panasonics awful blotchy approach to jpegs.) But apart from that i find the 5 an overall better camera producing more keepers for me than the 3 did. If you work with Raw-files in ACR the difference is clear. Even the base iso is cleaner in the 5, and from then on they are around one step better than the 3 all the way up to 800 for a gritty look. The 90 mm tele is really sharp in f5 (but awful in full open 3.3). And most importantly the image stabilisation is far better in the 5. All in all I very seldom come home with unusable shots from the 5, but you really have to learn to handle its limitations! Here is a handheld photo of the Salpetriere hospital in Paris. With patience, steady hands and doing some extra shots to chooce the best, you can actually shoot in 1/4 of a second in tele.