I have upgraded from FZ1 to FZ10 and now FZ20, so can share a bit....
Was attracted by FZ1 bcos of the Leica len and the 12x optical zoom + stabaliser, was not really excited abt the 2mp though. At the 2003 Sep/Oct Comtech show, it was offered at $599 with free 128mb SD + tripot + softcase. with option to buy a x2 len @S$99. couldn't resist so got one.
Later upgraded to FZ2 via firmware upgrade that enable shuttle speed - 1/2000 to 8sec & aperture Priority.
http://www.steves-digicams.com/2003_reviews/fz1.html
When FZ10 came out 3 months later, I was kicking my butt for not waiting a while longer. So I got a 2nd hand FZ10 - 4MP, manual control, external flash hotshoe, histogram ....
http://www.steves-digicams.com/2003_reviews/fz10.html
On hind sight, seems like Panasonic was clearing FZ1 to get ready for FZ10.
When FZ20 came out last year, I could not resist so I sold my FZ10 and upgraded @S$910 only softcase and cam - good things other accessaries like adapter tube, filter, etc can be reused.
Main feature - 5MP, Focus-Assist Illuminator , TIFF format, etc.
http://www.steves-digicams.com/2004_reviews/fz20.html
Still not fully explored the cam. was having much fun with the fantastic zoom since FZ1 and enjoy the convenience of one cam with min maintenance and ease of use + stabaliser....+ the famous moon shot that shows surface craters...
-ve point - noisy esp with high ISO, difficult to focus in dark indoor environment, etc - but I just love the ultra zoom and ease of use.
So like some CS member says, depending on your needs and budget - compare each features and get the one that suits u, you will enjoys it anyhow and after a while when u get better, u will upgrade accordingly.
p/s many other brands also have silimar features like stabaliser, ultra optical zoom etc & other features but I have not look other direction yet.
See this upgrader's comment(though with some commercial tone):
FZ10 :
http://www.zimfamilycockers.com/DMC...est_Photos.html
FZ20 :
http://www.zimfamilycockers.com/Pan...x_DMC-FZ20.html
Do some read/research into other brands cam before you decide which is most suitable 4 yr needs. Take yr time lower price and better features cam are always on the way - Have fun