KB answer the following:
1. what are you going to do with the photos?
a) send to friends via email - think small 4-6MP P&S 1/2.5"
NO
b) Print to 4x6, 5x7, or 8x10? - think 7-8MP sensor of 1/2" or larger like 2/3" (Fuji S100, Sony R100 etc..)
YES
c) display on large TV think 10MP+ APS-C or larger
YES
2. What do you want the camera for"
a. family occasions with 75% indoor and 25% outdoor (birhtdays, etc..)
The other way around - some 60% OUtdoors
b. travel and family (as above)
c. special functions like school sports and plays + travel & family (as above)
LOTS of this
as in the previous question the more demanding the situation the more useful is a better camera
YES -- ALL THREE OF THEM
3. How serious are you about photography
a. not serious just want good fun snaps
NONO
b. somewhat serious what to learn about f stop, shutter speed etc while taking family and travel photos
YES
c. deadly serious.
want to preserve photos for longevity and develop into a good photographer.
YES YES YES
you know the drill... :-)
You will find you will find the answer to your questions yourself.
BTW if you interested in the Panny FZ18 please also consdier the Oly 570UZ (hot shoe) and Nikon P80 (nice lens)
Olympus SP-570UZ digital camera specifications: Digital Photography Review
given that Oly will be setting up service center s in the metros to service their DSLRs maybe you will get service for their prosumers as well. Besides CCDs are not as sensitive to light as film so a hot shoe and external flash (which you can add later) will help in indoor situations.
a good review of the Oly 570
Olympus SP-570UZ - Magnificent Magnification - DigitalRev.com
a bad review
CrunchGear » Archive » Review: Olympus SP-570UZ
an ugly review
Olympus SP-570UZ Video Review - Digital Cameras - CNET Asia