Camera RAW Converter for LX3

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Has anyone got experience of using Adobe's PS RAW plugin to convert files for the Panasonic's LX3, FX150, FZ28, G1 or Leica's D-LUX 4.? I hear there's an issue with the conversion and that it converts the files to DNG which is a huge file. I just want to hear that I can open my RAW files in the plugin, make changes, fiddle with it in the main part of PS and then save to JPG! If anyone has gone through this process, have you had an issues?
 
DNG is a huge file? It's a RAW file container. My 15.6MB RAW files from my camera (in NEF) get converted to DNG through Lightroom, the end result is still a 15.6MB file, unless you tick the option to "embed original RAW in DNG" somewhere, in which case the file doubles.

The conversion process is lossless and DNG is a good format to store RAWs in anyway, and of course if you can generate a DNG then naturally you can also open the file in CameraRAW, process it, and save it as a JPG.
 

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