Panasonic GF1 to replace my Canon G10.
I have to say that I couldn't be happier with it! After having used it for a month I thought I would present some of my experiences with the format, and dispel some misconceptions:
1. What is micro four thirds? It is a variant of the Four Thirds Standard developed by Olympus. It is based on the same 4/3 sensor (21.63mm diagonal) that is about 1/4 the area of a frame of 35mm film (full frame). The difference that makes it 'micro' is the loss of the mirror typical of DSLRs. This reduces the possible distance between the sensor and the back of a lens. As well, the format defines additional lens contacts to aid in faster and smoother live view for video.
3. Is it really better than a compact, and as good as an APS-C DSLR? In my experience so far, coming from a Canon G10, I do get better results from the GF1. Stock is a particular niche that benefits, in my opinion. When you are talking about 'regular' snapshooters that only ever print a 4x6 it doesn't really matter much. But when you are submitting shots to be reviewed at 100% the pixel level detail, sharpness and noise really does matter. I have a higher acceptance ratio with this format than a compact and better yet much less time spent processing. I've never had to downsample an image to get rid of noise or grain. As for being as good as a DSLR I must say that it is close. Better would be quite a stretch :)
Another perk is that it makes full use of the live view on the LCD, letting you compose in different crop ratios, black and white, and with a live histogram (though it has its problems there). The fact that the format, including mount, is 'open' mean that at least two manufacturers (Olympus and Panasonic, plus Sigma) are making lenses and accessories.
The design and size of the sensor means that light can strike the sensor more straight on, making certain types of lens problems less of a factor. As well, the system can be lighter and smaller for the same aperture. The bigger sensor also means you get some depth of field back (or rather the ability to isolate with narrow depth of field) compared to a compact camera.
Finally, I find it to really be the sweet spot of pocketability and usability. Faster than a compact with higher quaility, yet without some of the limitations on the smaller DSLRs, especially when shooting video.
All in all I think it is a format with a lot of promise, especially as video takes hold. A camera with a mirror in it that is used with the mirror up (for live view stills or video) just doesn't make sense. Get rid of the mirror and make the best of it. That is the intent of this format. For most people the loss of sensor size is made up by the fact that sensors these days are really good. For stock it wouldn't be my only choice, and I still submit most photos with my Canon 40D, but compared to the G10 it is a much better choice for my pocket! (though not the pocket book!)