It makes a nice compromise camera for my wife and I. For her, it has a good point-and-shoot mode. For me, it has full manual controls, a standard hot shoe and high enough image quality (RAW files!) that I can carry it and not bitch too much about not having a DSLR on hand.
Other important specs: image stabilization, 24-90mm equivalent lens, f 2.0 - 3.3 (tops out at f/8), shutter speeds from 250 sec to 1/4000 sec with the updated firmware, and face detection AF. You can check out the full specifications on the Panasonic site.
I got my first chance to try out the LX5 with my Cactus v5 radio triggers and my speedlights about week after it arrived. As hoped, everything worked fine, as shown by this photo, lit entirely by speedlights.
Next, it was time go outdoors, and see how well this worked for blending natural light with a flash exposure. It was a sunny day, and I should have been a little worried, since the aperture tops out a f/8, that I might not be able to use fill flash without blowing out details.
But I wasn't worried, because earlier testing had revealed a pleasant surprise: full external flash sync, with radio triggers, up to 1/1000th of a second.
That's right, 1/1000th of a second flash sync - with radio triggers ! (Note, Cactus v5 radio triggers, other brands not tested) See it for yourself below - sunlight is streaming in from the right, and the flash is coming in through a 25-inch shoot through umbrella from the left.
And here's another, at 1/640th of a second:
Combine that high shutter speed sync with the fact that the LX5 has pretty good image stabilization, and it turns out to be an excellent tool for mixing ambient and flash exposures together.
Let me also say that face detection AF, when it works, is a god send. Not to mention, the flexibility in placing the AF area is excellent.
Even with all this awesomeness, it's definitely not a full on replacement for a DSLR. That small sensor, while it produces good images, simply can't match the image quality a DSLR will give you. Another disadvantage of the small sensor: it's hard to control the depth-of-field, the way you can with a DSLR.
This next pic shows pretty much the best this camera can do at crushing backgrounds - the lens is at full telephoto and wide open.
It's not horrid, but with a DSLR and the right lens, I can make that background nothing but creamy blur and make her really pop out.
That said, the LX5 is an amazingly capable strobist tool, and pretty fantastic for a point-and-shoot camera. There will be trips where I leave the DSLRs behind now, in favor of the LX5. Also, it's probably going to find its way into my camera bag as a backup camera for important shoots.