I don't think you can handle all situations the same. If your'e primarily worried about blown highlights, you'll want to expose for the highlights, or** even "expose to the left" a little. In doing this, try not to clip information at the left (shadow) end of the histogram. But occasionally, you may even want to allow some clipping in the shadows, in order to avoid blown highlights. For example, you might decide to do this in a very high-key lighting situation, like photographs of skiers against sunlit snow.
However - this is very important - the above is only true when you can shoot at ISO 80, 100, and (perhaps) 200 with the G7. You will definitely see more noise when you "expose to the left". Also, remember that if you allow clipping in the shadows you'll be losing some data in the midrange. This isn't necessarily a terrible thing, as long as you know why you're doing it.
On the other hand, if you're worried primarily about noise, you want to "expose to the right" - be sure the histogram touches the right hand edge of the screen, without clipping if possible. You'll get the maximum of image data and the minimum of noise that way. The difference in noise can be dramatic. You may even choose to blow out some tiny highlights in order to minimize noise in some images, especially when you have to shoot at ISO 200 and 400.
So - look at what you're photographing, see what ISO you're forced to use, and make a decision about whether you're worried more about "blown highlights" or about "noise".
From what I can see, the issue of blown highlights with the G7 has been a little overblown itself. It's probably no worse than the great majority of digicams out there. The noise issue is also over done, as long as you can shoot at ISO 200 or below. If you have to use 400, be sure you use a good noise reducing program during processing. Use it selectively, most aggressively in the shadow areas and less aggressively in the midtones .
With the G7, I personally would forget about ISO 800 unless I was just desperate for some sort of primitive record.
Bill Hansen