Panasonic TZ3 or Canon SD870 Help!

[consultant]

I'm currently evaluating both the Panasonic TZ3 and the Canon SD870 and having a hard time deciding between the two. I take about 50% outdoor photos (probably at least a third of those are action photos - kids sports), about 30% indoor photos half of those without flash and about 15% underwater while SCUBA diving.

I've been using a Powershot S50 for underwater the past 3-4 years and a Panny FX01 for my carry with me the past year plus.

My initial photo tests show the S50 has finally been surpassed by the TZ3 and SD870 in its ability to handly low light photos. The TZ3 also takes better photos in all condition than my FX01, so I'm ready to say bye bye to both of those and get one camera.

If you get hung-up on looking at pixels, the SD870 takes better photos than the TZ3 in low light. But the TZ3 has a better (albeit slower by a half stop) lens so there's no softness in the corners. At ISO 80/100 in outdoor photos the cameras take basically the same quality picture, although I did notice Canon nailed the color balance and saturation a bit better than the Panny unless you put the Panny in Vivid Color mode (the Canon is sort of inbetween the Panny's Standard and Vivid color mode so some may want to take the saturation down a tad in Photoshop when using the Panny in Vivid).

The TZ3 has slightly more agressive noise reduction so at about ISO 200 on up, the Panny loses a bit of detail in exchange for less noise. But this is really only noticeable at 200 and 400 ISO if you are looking at images at 100% or higher magnification on your screen.

I like the operation of the TZ3 better but like the size of the 870 better. Strangely though the small size has it's drawbacks as I seem to easily cover the mic with my left finger and the screen takes up so much of the camera you find yourself constantly smudging the screen. I also heard that you can't view the 870 screen through polarized sunglasses.

One big benefit of the TZ3 is that it will shot video in 16x9 aspect ratio without cropping due to the way the CCD is setup. (Will shoot still images that way too.)

It seems like it is a choice between a small, ultra compact that is a bit quirky to operate and only does 640x480 video, but has better image quality in lower light, versus a slightly bulkier/heavier unit that has 10x zoom, 16:9 video, but for us pixel fanatics, can't quite match the SD870 quality at ISO 200 or above. (But are we splitting hairs, or pixels rather, here?) With image stabilization though, how often does anyone need to go over ISO 200 anyway?

I'm TOTALLY on the fence. I keep being concerned about the slow 3.3 versus 2.8 lens on the TZ3 and underwater performance but I haven't seem anyting to indicate that will be a serious problem for the TZ3. Considering I sold my Sony DigiCam because my FX01 served fine as my camcorder in its place, seems like maybe I'd rather have 16:9 video and 10x zoom than a slightly better picture quality. But I AM a stickler for picture quality too. Guess you can't have it all.

Any insight would be appreciated.