The last time this camera appeared on Woot, I read all the remarks and ended up buying a refurb DMC-ZS3 (also known as TZ7) model from eBay for $139. I added an extra battery and two class 6 memory cards so that the total ended up around $200. It's the best $200 I ever spent for photography.
Before that, I used a Canon Rebel 6 megapixel DSLR and a DSC-W7 Sony point and shoot (7 MP) and always had good results. This camera beats both hands down for ease of use, versatility, and yes, picture quality. And that's before you get to that huge and very useful zoom. The movie mode works perfectly including beautiful zooms while filming, excellent autofocus tracking and stunning image stabilization, even while panning. I always worried that I couldn't get sharp images from a camera with such a small sensor but I was wrong. I love it.
About the batteries: yes, the newest software versions disable non-Panasonic batteries but there are exceptions. This battery for ten bucks: http://www.amazon.com/gp/product/B002MZ0ID0 works fine with my zs3 with firmware version 1.3. I don't know for sure if it SterlingTek batteries work with the ZS6 but I suspect so.
A superb photographer called Trensamiro has a beautiful photostream in Flickr here:
He provides extensive instruction on how to get the most out of this series of cameras basically by using the lowest ISO speed possible, making sure there is minimal camera motion (you can often use the 2 second self timer for that) and using maximum (mode 2) image stabilization for all shots. I used his suggestions which are in the remarks to the Flickr stream and they helped a lot. I have to admit I did not get as good results as he did but he's been doing it a lot longer.
Trensamiro feels that the slightly lower pixel count of the ZS3 makes is better than the ZS5, 6, and 7 which fit 12 MP in the same sensor area that the ZS3 uses for 10MP but others disagree. I don't know but I suspect any difference will be minor.
Leica sells an almost identical camera (there are subtle differences which don't much matter and often don't favor the Leica) as the VLux 20 which costs $600+ on Amazon and is unlikely to do more than this camera will.
Dpreview tested the 5 and 7 models here:
The Leica version is described here:
Look at these ZS3 Trensamiro images:
(remember to click on the image (sometimes twice) and then on "all sizes" at the upper right to get the largest view (Flickr is weird). And if you get the camera, read his comments which also apply to the ZS6.
More Trensamiro discussion and photos here:
This camera won't replace a current DSLR or probably even a 4/3 model for image quality but it will almost certainly do as well as any point and shoot camera with a small sensor and better than most and at this price, it's an outstanding deal. If you miss the woot, you can often get the ZS3 on eBay for $139 to $159.
One last thing. Be sure to get at least a class 6 memory card if you want to get reliable video.
And I recommend AVS video editing programs. They interconvert any format to any other, burn your DVD's, edit your video a dozen different ways and effects, they're fast and easy to use and the whole bunch of their programs is $60-- you can try them all for 30 days for free. They really work -- for me anyway. Here: http://www.avs4you.com/index.aspx