The incredible shrinking camera.
While our editors like the DSLR-style body, it's not much smaller than the less-expensive Olympus E-420 ($448, street, with 14-42mm f/3.5-5.6 Zuiko ED lens) or Pentax K2000 ($700, street, with 18-55mm f/3.5-5.6 and AF200FG hot-shoe flash). The G1 measures 4.9x3.3x1.8 inches. That's less than a half-inch smaller than the E-420 in each direction. Doesn't seem like enough in itself to warrant a new system.
The G1 is really just a proof of concept. For instance, it doesn't shoot video, though Panasonic strongly hints that the next version will capture high-definition video.
Controls are, for the most part, well placed, with a decent number of switches, dials, and buttons. A four-way switch next to the mode dial and behind the shutter button lets you choose the drive mode, while a tiny dial on the top changes the focus mode. A cluster of buttons next to the LCD offers quick access to ISO, AF mode, white balance, and metering. A Quick Menu button takes you to image size and aspect ratio, while the Film Mode button gives you various color and black-and-white looks.
We really like the clickable scroll wheel in front of the shutter button. Just press it to get to exposure compensation, and again after dialing how much comp you want. Once our testers got the hang of it, adjusting exposure was fast and easy.
For those who want simplicity -- and the backers of this system count them in the millions -- there are lots of scene modes, as well as Intelligent Auto, which chooses a scene mode and ISO for you, and even adjusts brightness to bring out details in shadows or highlights.