Upgrade! Lumix TZ7 to Lumix G10 worth it?

Yes (unless your just using the kit lens in normal lighting)

Don't get the G10 though, the GF2 is much better and just as cheap (it can do 1080p AVCHD etc)

Edit: or Olympus EPL1 if your not interested in video and don't want to process RAW files.
 
If you want a DSLR look at the entry level Nikon and Canon offering and go from there, unless you have very specific size requirements.
 
My local camera shop is selling a G10 for £230 and offering a years warranty! I thought it was a great deal!
 
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