I own both the GF1 and the LX3, and I find that they serve different purposes for me. Having lugged around a D80 for over 2 years, I have a bit of a bias against PnS cameras. The GF1 seemed to be a good middle ground.
GF1 (with 14-45 kit): great camera, lots of fun using it as an "everyday dSLR", and I feel that I have full creative control (just as I would have on an SLR). I really miss having an optical viewfinder, though I suspect it's just a matter of time before I get used to it. When doing macro photography, the magnification functionality on the liveview screen is awesome. When doing landscapes, I'm feeling a bit constrained at 14mm (28mm equivalent). Only alternative at this point is the 7-14mm, but considering that it costs as much as the GF1 kit, I haven't pulled the trigger on it. That's where the LX3 comes in...
@ 24mm, the LX3 gives me the width I like for landscapes. Also, it's such a small and compact PnS that I favour it when heading out with friends in the evenings. My wife tends to have it in her purse all the time as her PnS, and I love having it for the full creative flexibility.
At the end of the day, I think that in most situations, both produce excellent quality shots. I use both extensively, and frankly, I wouldn't pick one over the other. Yes, the GF1 has a larger sensor and hence should be able to handle higher ISOs better. But if you're looking for high ISO performance, then you need to move up to dSLRs. For me, the most fun has been grabbing different lenses and mounting it onto the GF1 and getting creative (i.e. my Pentax 25/1.4 cine lens) with DOF and bokeh (without having to grab over 2kg of dSLR gear)!