The Panasonic Lumix GF3 is a dramatically different camera from the earlier GF cameras before it, and represents a significant breakthrough for the Micro Four Thirds system. And you don't even have to take our word for it; all you have to do is simply look at it.
Micro Four Thirds cameras have always been smaller than DSLR cameras, but they've never been small enough to rival compact cameras. The Panasonic GF1, GF2, Olympus E-PL1 and E-PL2 cameras have come close, but they were still noticeably bigger and heavier than compact cameras. The GF3 changes that. Its body is not much bigger than a chunky compact; in fact, it's just slightly bigger than Panasonic's super-zooming compact TZ20.
Despite its small size, Panasonic's engineers have somehow found a way to still squeeze a Micro Four Thirds sensor inside of it. Not only that, they've also retained the touch-screen the GF2 had, with the same touch features like touch to focus and touch to zoom. The GF3 introduces a new design identity separate from the previous GFs, with curvier edges and a much more obvious circular dome emphasizing the lens mount.
The GF3 comes with a brand new Venus Engine VII HD image processor and sensor, which are different from those in the other new Lumix, the G3. Like the GF2, the GF3 shoots 1080i video and 12.1MP stills. Unlike the GF2, the GF3 eschews the DSLR-like control dial which was found on the upper back, and replaces it with a wheel dial. It still comes with a built-in flash, but instead of being mounted at the side like the GF2, the flash now comes mounted in the center, replacing the hot shoe. The stereo microphone has been reduced to mono, most likely to save space.
Updated (07-07-2011): Since publishing our preview article, we've since updated this review after testing a production model GF3. We've added a new Design & Handling II page, as well as Image Performance, Sample Photographs pages and a new Conclusion.