I have also been essentially a "Canon lifer." But over the past few years, Canon has just been sitting on its reputation, while Panasonic has been producing innovative new cameras.
I've owned a number of Canon cameras, beginning with the "original Digital ELPH," the S100. Here's a list, if I can remember them all:
S100
S40
S1IS
G5
Pro1
G6
SD300
SD550
400D (XTi)
TX1
S5IS
SD880IS
Of that list, I now only have the Pro1 and the 400D.
Meanwhile, I've now had three Panasonics:
TZ3
LX3
FZ28
And the TZ3 is gone, along with all of those Canons.
My "reference standard" through all of these remains the Canon Pro1 -- nailed down to ISO 50, it had image quality that I was always abundantly happy with. I would still be using it daily, if only for a few issues:
1. It is =agonizingly slow= to write to the memory card. Once you fill up the buffer (about 8 shots), you might as well sit it down and walk away for a couple of minutes.
2. It doesn't have IS, which is always great to have.
3. It's too big to fit into my pocket, and I have always valued pocketability.
Still, I've always loved the Pro1's image quality. Here's a bunch of examples, in a gallery from a trip I took to Las Vegas in 2005:
http://home.comcast.net/~thoots4/vegas2005/index.html
(Sometimes Comcast has problems serving this -- if it doesn't work, try again the next day.)
Canon's image quality essentially "went downhill from there," as far as I've always been concerned. Of course, some folks don't share my judgement here -- for instance, witness the Second Coming with the new G10. But, technically, the Pro1 used VERY LITTLE in-camera noise reduction processing, whereas the entire story with the increased pixel densities since then has been ALL ABOUT increased amounts of in-camera noise reduction processing.
Anyway. Since the Pro1, cameras have gotten much, much faster, and IS has become commonplace. So, "Dear Canon, could I get a faster Pro1 with IS?"
Of course not. All they've come up with has been high-pixel-density G-series cameras without the electronic viewfinder, articulated LCD screen, and fast lens that the Pro1 had. "This isn't progress."
OK, change gears. You might note a steady stream of "pocketable" cameras in my lists above. Indeed, I started with a "pocket camera," and I've always carried one in my pocket, ever since. Boy, did Panasonic get my attention with the TZ3 -- with a 28mm wide-angle lens and a 10x zoom, all in a pocketable camera that was actually very fun to use! But, like the other high-pixel-density cameras on those lists, I sure wasn't very happy with the TZ3's image quality.
And then Panasonic came out with the LX3. With that super-fast, wide lens, and the end to this more-megapixel madness. And it'll fit in my pocket! Canon just isn't doing anything like that at all. And so, Panasonic has been earning my money. While Canon just plows more megapixels into its cameras, doesn't give them lenses anywhere as good as my old Pro1 had, and anything it makes in a pocketable format is only of "snapshot" quality.
And, best of all, when I compared my LX3 to my Pro1 in terms of image quality, I found it every bit as good, if not even a bit better than my old Pro1 standard. It turns out that Panasonic gave me EXACTLY what I wanted. While Canon remains clueless.
--
Tom Hoots
http://www.flickr.com/photos/tomhoots/ 
