The Panasonic Lumix TZ1 delivers fair results at its slowest 80 and 100 ISO sensitivities, although some noise is visible in dark shadow areas even in these modes. This noise becomes more obvious at 200 ISO, although still delivers acceptable results for modest print sizes.
At 400 ISO and above though, the TZ1's noise and noise reduction visibly reduce detail, which can be seen most obviously in the increasingly smeared fencing and foliage. The most dramatic result though is with the TZ1's High Sensitivity mode, which reduces the resolution and applies considerable noise reduction to deliver what looks like, at 100%, a Photoshop artistic filter; another example of this can be seen on our Features page. Manually setting 800 ISO gives a far preferable result.
Noise is the TZ1's greatest problem and can only be avoided at the slowest sensitivities. To be fair if you're only printing at modest sizes and not staring at 100% crops, it's not a huge problem, but if you demand clean results, you'd be better off with a different camera.
Crops from a similar area taken with a pair of digital SLRs can be seen in our Sony Alpha A100 review. While anyone shopping for a compact is unlikely to consider a DSLR, it's interesting to compare the results none-the-less. Low noise levels are where DSLRs excel, thanks to their physically larger sensors.