Actually, the little Panasonic does a pretty decent job considering its cost. It has image stabilization and a 12X zoom aided by the wickedly fast focus and very small shutter lag. I was using it yesterday in the rain and it did a fine job in pretty low light... just the P setting. It locked on everything I saw, whether 10 feet away or a block away. It doesn't have a lot of manual features, but I'm very happy with it as a street digital... small, quick to shoot, all of that.
Compared to the Digilux 2, it outperforms in terms of speed of focus and shutter lag. However, for me the Digilux 2 has excelled in the area of portraiture and landscape, when speed is not such an issue. I'm sure the Leica lens has a lot to do with it, but the photos out of the camera are sharp, colorful and nuanced. I'm not a real techie, but there is something very satisfying about using the Digilux and I always marvel at the "sophistication" of its output. I guess I mean by this that it seems to read a scene just the way I see it and it is rare that sharpening or even color tweaking is required. However, it doesn't like low light and has a noticeable shutter lag.
The Canon 20D is another animal. It is hard to compare it to the other two cameras since its excellence is so mixed in with the variety of lenses available and its whole DSLR level of performance, as has been documented by all the rave reviews since its release. Other elements such as camera raw and support of high "ISO" give it a huge edge over any point and shoot. (I tend to think of the Digilux 2 as a p&S on steroids since it cannot accept lenses...)
Anyway, I'll try the Panasonic on a portrait or two and see what happens. (That's after the 20D session is complete!) I might be surprised.
I always use the Digilux at some point in a session, just to mix things up, and more than once the real keeper from the shoot was produced by the Leica!
If you're interested, I've posted a lot of personal shots on my Fotolog site, where in most cases I identified the camera used. The last 8 or so are from the new Panasonic... some are PS'd for fun, but there are some flower shots that show it off pretty well...
http://www.fotolog.net/christiemalre/