The Panasonic 20mm f/1.7 has horrific flare characteristics

A fair amount of psychology here. A little balance is a good thing:

1. I took a look at some of my favorite 20 1.7 mm shots to examine flare, and discovered the following:

• Very few had any signs of flare at all.
• A goodly number of cases where I would expect flare did not show it. Specular highlights, lights at night.
• Of those that did flare, I judged about half of those to be improved by it. 

This one, although it's surprising to find flare (not pin-point light, not really bright light), I LIKE the flare.

2. I have never once seen banding with my 20. I am sure it exists, but when I have seen it on DPR and other places, it's  high ISO usually combined with high boost of low-level exposure (shadows). Generally, I limit my ISO to 1600, so I'm not surprised I've never seen it, and I don't think anyone else should be surprised, either. Of course, if you shoot that once in a lifetime photo at ISO 6400 and lift the shadows, you may well be unhappy. I don't hold it against anyone who would be disappointed, but I don't feel it is sensible to be disappointed.

Flare and banding on my Panny 20? For me, totally inconsequential in the context of all the wonderful things it has done for me, AND at a quite cheap price

3. When I got my E-M5 I was HORRIBLY disturbed by the haze I'd get with my 12-50 when off-axis light fell on it. Yeah, not the greatest lens, but it's proved fine for me over two years. I'll upgrade when I feel I need to. In the mean time, I seldom see that haze anymore, probably because I shoot to protect against it (partly because it is just rare). So, initial panic almost always subsides when you put your initial reaction in perspective (what lens does better? how much does it cost? what proportion of your shots are really disturbed by the problem), things really simmer down.

My reaction: relax and find some perspective.