Panasonix gx1 vs entry level dslr

Apart from the obvious size advantage I'd say the GX1 has a very big advantage over entry level DSLRs; the built in flash can be set to a bounce position.

It's not as powerful as a flashgun, but if you're using the built in flash on both the DSLR and the GX1, and you've got a ceiling to bounce off, then the GX1 will give you much nicer pictures than a direct flash would.

Obviously you can add a flashgun to a DSLR, but then you've got an even more bulk and the same kind of flashgun can be added to the GX1 anyway.