I have been clinging to my film camera's. So the G1, and after selling it on EBay, the GH1 ( I bought the G1 on EBay for $400 last March w/ the kit lens and sold it for $585, so I actually made money on a digital camera) is my first non P&S digital camera.
I was originally attracted to the G M/43 series for a way to reuse my M Lenses and a couple of old Canon FD lenses.
The image quality of alternative lenses with an adapter is OK, but the kit lenses are actually better IMO, maybe its that they are aspheric, contemporary in design, and use software correction, my M Lenses are Canadian made, and 20 years old, so I got some good results, but feel that the Panasonic lenses are so good, and they have the ability to use state of the art AF, and the 2 lenses I have added - the 7-14mm and the 20mm 1.7 are so, so good that I rarely use the adapter much anymore.
The GH1 is probably on par with what I get scanned from my M4-P with Portra 400, if I stay below 11x14, but then I still favor 120, and nothing digital can touch Mamiya 6 -120 Portra 160NC scanned with the Epson Coolscan 9000. The 5D/Nikon 700 are not in that league, but for digital my Lumix GH1 fills the niche.
Video, be forewarned, requires more editing - to present something that is interesting. I have learned, I have bored people with HD videos of my cats, but I don't have the hours of attention required to sit in front of Final Cut Pro to put something together that is compelling. I would need a story, good dialogue/narrative, sound and a series of clips, to put something that would cause a viewer to linger, otherwise I am just littering YouTube with numbing nonsense that is pretty much 80% of YouTube anyways.
So, if your focus is film/stills first , with the option of shooting some random HD footage, consider the GF1, just my .02
Back to the image quality and overall opinion on the GH1, I like the EVF, a lot, easier to focus than my Leica, the 20mm pancake is a must have, and the superwide 7-14mm is so much fun, these 2 lenses are almost must haves in my mind. The image quality is very good, again, probably on par with the 35mm ISO 400 scanned images, its small, and easy to carry about. If someone hoists a 5D out at a casual event, people tend to suck in their breath, ... that's a serious camera, and at 4+ pounds , it definitely has gravitas, whereas the Lumix is smaller and more stealth, pretty much in line with the Leica rangefinder philosophy.
Very happy with it.