Yes, the Contax T3 (35mm) is a GREAT PnS, the images are very sharp and you get the beautiful colours that are so typical of Carl Zeiss lenses. In fact, the glass is sharper than what you get out of most SLR lenses.
I have tried a Ricoh GR1V (28mm) and GR21 (21mm), of which both exhibit nice sharp images, but the Contax's colour is better. Prices for Ricoh's GR1v and GR21 have been skyrocketing recently as they are getting harder and harder to come by, and they have been out of production for quite a while already. In fact, the GR21 has doubled in price over the past two years, simply because only about 5000 were ever produced.
I have also tried a friend's Leica Minilux (40mm) and the photographs are very very good, not as sharp as the Contax, but very smooth feeling to the photographs. The replacement of the Minilux is the CM, and you should be able to try one out at local dealers.
For the cheaper PnS with zoom, try this
link, where I put up onto Clubsnap when I was looking for an idiot proof setup. For a little more money, you could try the Leica Minilux zoom (35-70mm), which I don't really like simply based on its specifications and price (never tried it before), or the Contax TVSII (28-56mm), which I simply love to use owing to its manual zoom. Unfortunately, this camera is no longer produced, and second hand ones in good condition are expensive. The original TVS is still widely available, but has a smaller and darker viewfinder. Most people say that the glass on the Minilux zoom is better than the TVSII e.g. light falloff at the corners typical of wider angled lenses, but the TVSIII should easily beat the Minilux zoom. Problem with the TVSIII is the awful drawbridge design.
The Fuji Silvi f2.8 Black (24-50mm) is another favourite, but it is only available in Japan and can get expensive depending on which part of Japan it is purchased from. The no exposure compensation silver cououred version is sold very very cheaply in Singapore as Fuji ZoomDate f2.8, and is still available in Singapore.
Of all the cameras that I have listed above, I feel that the Ricohs comes with the best camera body specifications combination and is the most user friendly. In terms of glass, it should be a straight fight between the Contax T3 and Leica CM (I think so, cause I was told that the CM has a better galss than the Minilux owing to the better coating, but then again, I don't even know if we are able to see the difference in most circumstances). BTW, I read somewhere that there is a recall on the Leica CM, owing to some fault, but I cannot confirm this.
Each film PnS has it's unique stength, so there is not one which is outright better than the other. At the end of the day, it really depends on your style of photography or the specifications that you place more emphasis on.
