Because I sometimes need to crop heavily for some web pages or prints I try to make the jpeg as clean as possible with both Noise Reduction and Sharpness at minus 2. That way no sharpening halos when printing a savage crop to a postcard size (my limit is about 200 camera pixels per inch of print) and no detail smearing caused by the default noise reduction settings. Post process sharpening and noise reduction works better in that case.
In doing that so far I see no need to use RAW files, but keep taking RAW + jpeg occasionally just in case, for those maybe "difficult" shots.
I set the camera to have the flashing highlight warnings on review and that gives instant feedback of what's burnt out and if it's really important. I have the camera more or less permanently set to minus 0.33 EV exposure compensation which helps somewhat with that. Sometimes I need to take that to minus 1 EV or once or twice to minus 2 EV in difficult scenes. Intelligent Exposure is set to Low and seems to intervene with small benefit in some situations.
Most reliable shooting is done with P mode and use program shift via the joystick if you think you know better than the camera. Get used to doing things via the joystick, it certainly saves messing with the slightly clunky menu setup.Focus set to centre rectangle for more reliability about what it is going to latch onto, aim, half press to focus, then re-frame the shot and complete the shutter press.
Stay as much as you can at ISO 80 and of course that f/2.0~f/2.8 lens really helps and it is good at f/2.0 so no worries. Only when desperate move away from ISO 80 and maybe go as far as ISO 200, if really desperate for a shot then try higher ISO but get ready for noise troubles and the result will not make a decent large print but will be perfectly OK for a postcard print. I leave mine set to limit at ISO 200 if I use Auto ISO.Being really lazy I leave the camera in Auto White Balance and trim it later in Silkypix, seems to always work OK for me. In difficult situations I often shoot RAW + jpeg so can resort to using the RAW if the jpeg was really off.
Set the minimum shutter speed to 1 second instead of the default 1/30 as it is possible to get acceptable results hand held at 1 second at wide angle with a few tries at the same shot. I use Mode 2 OIS setting as in the web pages it keeps saying that mode works better than Mode 1. So far I have not found problems with leaving it in Mode 2 when on a tripod, more tests needed there.
So I shoot mostly P mode for reliability and speed of operation, sometimes in A mode when I select maybe something in the range F/3.5 to f/4.5 but really I'm fooling myself, P mode is easier and less prone to errors. Then rarely I'll use Manual mode and that usually only for testing purposes and for using foreign flashes on the camera.
Much arguing on forums about EZ zoom but stay away from it unless you only want postcard prints, keep the camera always at full resolution in whatever aspect ratio you choose and then do post process crops to get a result for screen use at up to maybe stretching it close to 300mm equivalent, but better to never take it past maybe 120mm equivalent - or use Digital Zoom but never past 2x of digital zoom which displays as 5x on the LCD in the blue bit of the zoom indicator.I hate noises in cameras so all sounds are turned off, and that forces me to look at the LCD for focus confirmation instead of listening for annoying and generally intrusive beeps. Focus assist light is off as well to stop annoying others. Zoom memory is set on so camera will come back to life with same setting, that suits the way I do things.
Make sure you tether the lens cap to the right side instead of the left side shown in the manual. On the right the cap is easily cupped in the right hand holding the camera so no blowing in the wind problems and it never gets lost. That and a wrist strap plus a belt pouch makes for an ideal way to use the camera.
Get a Lens Pen to use on that front lens when dust or finger smudges get there, every little bit of dust shows in the image, especially at wide angle.
I never use scene modes or iA mode so no idea of how good or bad they are, there's too many limitations in them so I never go there. The only scene mode that maybe of use to me is the High Dynamic Range, it switches the camera to 400 ISO and has proven to provide a decent result in situations like being inside a room looking out to a scene outside - it appears to make a decent job of not allowing the underexposed inside of the house getting too dark. Use with caution on outdoor scenes as often the results can look overcooked.
Many people complain about the menu system, but it is OK once used to the names things are called. Be aware that the zoom lever toggles through menu pages, saves many up/down button presses.
Lately I set up a true "desperation mode" into C1 where I have it set to Dynamic B&W with all Contrast, Noise and Sharpness all set to minus 2, auto ISO with limit at 3200. Intelligent Exposure at Low and Exposure Compensation at 0. Haven't had to use it yet, but one night may see the need.
I normally use Silkypix for all RAW and jpegs, works fine for me. If people complain about the LX3 manual then they should read the Silkypix manual and then understand that the LX3 manual is a marvel of clarity by comparison.The latest way I use the camera is this.....