I've had this camera for about 6 weeks now and I think it's great. I also have an XZ-2 to compare it alongside and I must say, if I'm taking a small camera with me I'll go for the XZ-10 every time. There's a lot of rubbish written on the reviews about it only having a tiny sensor and that the lens produces lots of CA but, y'now, it's a tiny camera aimed at people who don't expect it to compare with a 5D Mk3! I haven't noticed any major problems with either the lens or noisy images. Granted you are never going to get a really shallow DoF with such a setup but it really isn't that great a difference from what you'd get on a 1/2.7" sensor and for its limitations the camera produces some really great images.
The slow motion video is fun to play around with and its standard and full HD video functions work fine. Also it has a cute multi-image function where you can make a picture collage which will be great for some creative shots of the kids etc.
I'm actually selling the XZ-2 (they were both prizes) and have bought an OM-D E-M5 instead. The XZ-2 is a great camera but seems to be caught between two ideals, whereas the XZ-10, with an image quality not far behind its bigger brother, does fine as a compact, take anywhere, fun device that would please anyone who doesn't have to pixel peep at every image they take. Even the digital zoom is quite usable if you want a bit of extra reach without having to crop and resize etc on you computer or tablet.
As an aside, Olympus have won me over - all my Canon DSLR kit that I've accumulated over the last decade is going on ebay.