I have to admit that I don't really take any pictures in full manual mode, but on my Fuji 602 the "portrait" preset gives you a wide aperture and a shorter shutter speed, so you get that blurry background effect. It's really good, eg - http://public.fotki.com/altman/2002_the_album/california_2002/100_fujidscf0255.html

Problem is, my 602 takes such nice pictures I'm afraid of upgrading it because I'm worried I'll be disappointed. My Canon S70 (7MP vs 3 "real" MP of the 602, and with admittedly a much smaller lens) takes totally awful pictures in comparison - they just look blurry. Then again, I do have the waterproof case for it and have used it down to 30m taking pictures of whale sharks so it's good for something

I've been regularly tempted by the Panasonic FZ series - bigger zoom, very light, image stabilisation - but havn't quite taken the plunge yet. I'd like something that was fairly decent at big ISO numbers, but really can't be arsed to carry a full DSLR around. The 602's LCD eyepiece is just fine for me, and is, obviously, "through the lens" viewing. It's higher res than the LCD on the back, too.

tbh, the 602 seems to take pictures that compare well to many DSLRs - it's just nowhere near as flexible. That and it won't take any CF apart from a 1GB microdrive without corrupting the FAT on it, which is where it really shows its age. The VGA movie mode is still excellent, it was one of the first that could do this.

Hugo