Experimenting with my new Panasonic LX5 point and shoot over lunch at UCLA Faculty Center.
Versus the previous (2 year old) LX3, the LX5 is a pretty mild upgrade.
The 24mm-90mm/f2.0-3.3, 3.8x zoom lens is the most significant upgrade over the previous 24mm-60mm/f2.0-2.8, 2.5x zoom lens. The new lens is still f2.8 at 60mm, which is pretty good. It also appears to be somewhat more sharp when wide open, but I can't tell for sure-- the old lens sharpens up a lot when stopped down from wide open, so the new lens could just be less sharp all 'round. :-p
h.264 recording instead of MJPEG is another major improvement, although less of one than I imagined. The controls are slightly redesigned (for the better, but honestly, it's a mild set of changes), the camera is overall slightly faster (again, marginally so), and the burst mode is now up to a fairly quick 2.5fps-- but handicapped by a 3 frame limit.
Noise performance is also improved over the LX3 and Canon S90 (and Samsung TL500, and other previous-generation high-performance P&S cameras)... but compared to the also-brand-new Canon Powershot S95? It's probably not quite as good. We're talking maybe a half-stop or third-of-a-stop difference so it's marginal at best. It really boils down to do you like Canons better or Panasonics better, then buy either, they're both pretty good for P&S cameras.
Is it an upgrade I would recommend to current LX3 owners, or Canon S90 owners? Or Samsung TL500 owners?
Probably not. It's really not that big a set of upgrades in practical use; combined, the five modest ugprades togethera are rather nice, but they're not hugely compelling.
If you are coming from a typical tiny sensor point and shoot with more normal lens, the wide, very bright lenses of the LX5 (or Canon S95) are revalations and well worth the upgrade. If a good deal can be had on a previous-generation LX3 or S90 then maybe consider those, but the price on the LX5 and S95 isn't that bad either...