The DMC-FZ28 Is About As Good As a Compact Camera Gets

The Panasonic DMC-FZ28 is the best compact digital camera I've used yet.  Between the excellent Leica lens, the ability to save in RAW format, and the very effective operating software, this little Panasonic will do almost anything I ask of it. While it isn't a DSLR, it should fill the needs of most people who need more capability than offered by typical compacts, but either cannot afford or don't want to carry the bulk and weight of a DSLR.
I've owned two "superzoom" compact digital cameras prior to this one, and I have used at least eight others over the past few years.  Comparing reviews and technical specifications with my number two selection, the Canon SX10 IS, I chose the Panasonic because of its ability to save pictures in RAW format, which allows for digital development and the ability to use Photoshop with the image, as captured, without any data loss due to jpeg image compression. While this was very important to me, it may be of little or no importance to someone else who is trying to decide which superzoom compact camera would best suit their needs.
Technical specifications and detailed reviews of image quality and performance can be found elsewhere on the web, so I'll limit this review to a few observations based on my use.
I've had the camera since January 4, 2009 and have shot nearly 4,000 pictures.  Automatic mode is most useful to me for on-the-job photos where the ability to take photos quickly with minimal fuss is not only appreciated but required.  I usually don't have time to make adjustments for image quality enhancement in the field.  As such, the DMC-FZ28 does an excellent job of choosing f-stop, shutter speed, and ISO that consistently delivers better image quality than any digital camera I previously used on the job. In a social situation, where snapshots are the norm, the little Panasonic performs equally well.
Though more limited than a DSLR, the DMC-FZ28 allows easy manual control of ISO, f-stop, shutter speed, and focus. As I cannot yet afford the DSLR I want, this camera still allows me complete control while delivering image quality that is surprisingly good for a compact camera. No, it doesn't produce DSLR-quality images. However, it is a step well above most compact cameras at a price that still qualifies as compact.
Shutter lag really isn't a problem with this camera--provided the exposure and focus are set. Once these are set, pressing the shutter release results instantly in a photo taken. In fact, if one hurries a bit too much and presses the shutter release fully before the auto focus is set, the shutter will release a bit too quickly and give a nice blurry picture. That is not a problem with the camera, as all auto-focus mechanisms take a little time to set, it is operator error. After all, this is not a professional grade camera. One can minimize this error by 1) being more deliberate, which is necessary for photography in any event; or, 2) set the auto focus to continually refocus so it will be focusing as you point the camera. This will, however, shorten battery life as the auto focus will be constantly moving the lens.
Many superzoom cameras are plagued with barrel distortion and chromatic fringing. Barrel distortion has been imperceptible, except at the greatest possible zoom (18x, the equivalent of a 480mm lens on a 35mm film camera). Even at maximum zoom, the barrel distortion is barely noticeable.  I have yet to find significant chromatic fringing in any jpg images from this camera.  Though image clarity, and color quality are on par with the Canon S10, the lack of chromatic aberration and barrel distortion seem to make the image quality marginally better than the Canon S10 I almost purchased. However, the Canon seemed to perform a bit better in low light.
The DMC-FZ28 is large and bulky compared to the typical, flat, compact digital camera--you can't just put it in a hip pocket.  However, compared to a DSLR, it is tiny and very light.  In fact, it is significantly smaller and lighter than the Canon S10. Despite the light weight, the little Panasonic does not feel cheap or fragile. It appears to be as well built as any of its competition.
In addition to picture quality and ease of use, the Panasonic comes with a Li-Ion battery (and charger) that is good for at least 350 photos (not using flash or RAW format). Most of the competition (including the Canon) use AA batteries, which, while conveniently available, cannot match the performance of the Panasonic's battery.  I purchased an additional pair of batteries for $8 each and will never run out of battery unless I forget to charge them.
The DMC-FZ28 uses SDHC memory cards.  I have successfully used a 16GB card, which will hold an enormous number of photographs: over 900 RAW+jpg or over 2,700 jpg at max resolution.  The specifications state that this camera can use 32GB SDHC cards as well.
Generally speaking, I am very impressed with the FZ-28. However, there are a few things that are less than perfect. The lens cap must be removed before turning on the camera because the lens will strike the back of the cap. This is a silly problem that should be fixable, yet it afflicted my Canon S3 IS as well. The optional lens adapter turns out to be less useful than on my previous Canon. The adapter on my Canon served not only as a filter and optional lens mount, but as protection against accidentally damaging the zoom lens when extended. The Panasonic lens adapter is too narrow and long when used with the 27mm (equivalent) wide angle setting, as it cuts off all four corners of the frame.  At about 35mm (equivalent) wide-angle setting, the lens adapter does not interfere. While the Panasonic stamps the date and time on each image file, there is no way to display the date/time on a jpg image from the camera.  This is an oversight that could limit its use in certain job situations. It can be done when developing a RAW image, but that increases the amount of time I must spend processing images, when a simply software selection should be available in the camera.
I paid $264 for my DMC-FZ28, which is about half the price of low-end DSLRs.  If a low-end DSLR will meet your needs, then I would recommend one over this Panasonic.  Because of the larger sensor, faster effective ISO, faster shutter speed, and greater f-stop range, a low-end DSLR is able to function well in situations that are beyond the capability of the little Panasonic.
On the other hand, if you don't like or cannot carry the added bulk and weight of a DSLR, or you simply cannot afford one, the DMC-FZ28 is a decent compromise that will allow control of all photographic parameters, save images in RAW format for later Photoshop work, and (within its limits) will return sharp, clear, and colorful photos beyond any expectations of a compact camera.  Even after I can (finally) purchase my DSLR, I'll keep one of these around just because it is so light, compact, and easy to use.