LX3 Raw VS Jpg

It all boils down to whether you are happy with jpg results or not. There are a couple valid reasons to shoot raw but most of the time it doesn`t make a big difference and the effort to make a significant gains using raw mode isn`t always worth it.

The sensor IS very small especially when compared to one used in a dslr and noise is almost always the biggest issue anyway not to mention the inherent problems that P&S cameras have capturing action.

P&S cameras are what they are , and apparently their small size is the best reason to be using one.

I have an LX5 myself and I shoot jpeg.