Lumix had always been known for their video quality and SZ7 is no exception. It supports full HD resolution (but you can use lower resolution as well), you can zoom while taking video, and it has stereo mics. I found the mics to be excellent quality, they're very sensitive and pick up smallest sounds in a quite room - I could hear noises from outside and even myself breathing. It also works great for loud conditions, I recorded at loud rock concerts and audio sounds great with no distortion. In fact, a friend of mine was also making a video at a concert with a ZS5 (which is a more advanced but older camera), and mine came out brighter and better sounding.
For taking photos, I really appreciate the "Min Shutter Speed" setting that most cameras in this class lack. In low-light conditions, the camera would use 1/8 shutter speed, and I was getting a lot of motion blur when taking pictures at concerts. When I set shutter to 1/30, problem solved.
I was choosing between this camera and ZS20/ZS19 which is better, but chose this one because of its size and weight. Having a pocket-sized camera is important to me.
I also really like that the battery charges inside the camera. In my old Nikon camera, the feature that I hated the most was having to pull the battery to charge it, not to mention needing an external charger.