I like Leica a lot! This particular model Leica L Lux 3 is compact. Panasonic makes a cheaper (Panasonic Lumix LX3 and FX37) type using Leica's lens. I still think Leica has the best lens all around. The Leica L Lux 4 is a little bigger and pricer but probably what I would go for because I like bigger camera.
There are so many cool cameras out right now for compacts, I think it will rule the market. I prefer these to the bigger DSLR.
I have been looking at the Canon G series. The G10 was a year ago is replaced by the Canon G11. $500 but not as compact or pocketable.
But my new fave is the micro four thirds with interchangable lens.
Panasonic makes one call GF1 $900
and Olympus digital Pen $900
My first two digital cameras are from Panasonic with Leica lens. The LC1
has an amazing full size Leica Lens on it.
I think the Leica L Lux 3 is a very good compact. I would not hesitate to get it at $350 price. The name Leica is stylish and fashionable and the quality is very good.