So I've owned the Panasonic LX3 for quite some time now and overall I like it a lot as my DSLR alternative. The only weaknesses being its limited pocketability and short zoom range (24mm-60mm). For a point & shoot, it's packed full of yummy features and controls that will satisfy the majority of control freaks out there. Enter the Canon S90. Reborn from the ashes of the old S-series (which hadn't been updated for 4 years), the S90 brings back the RAW-shooting capability of its S70 progenitor and more importantly, does it in a significantly smaller body.
One other notable feature on the S90 is the large lens aperture (for a point & shoot) on the wide end (f/2.0 at 28mm). Unfortunately that wide aperture isn't maintained across the zoom range (dropping down to f/4.9 at 105mm) but I assume that wouldn't have been possible without increasing the size of the camera significantly. Now the LX3 is also capable of f/2.0 at its widest setting (24mm) and that decreases slightly to f/2.8 at its longest (60mm). So it's only natural to compare the two although the S90 is one stop slower (f/3.5) around the 60mm range.
For this shootout, I'm only testing the JPEGs, not the RAWs, from each camera. Photos were shot in Av mode, white balance was set to Tungsten, image stabilization was turned on and i-Contrast was set to Auto on the S90 while iExposure was set to Standard on the LX3.