I am looking at a micro 4/3 camera for a gift to someone who is out growing point and shoot, but not ready for the size of the DSLR.

I am leaning to the powershot 40 for this purpose as it fits the niche

but the micro 4/3 are small and might be a better choice.

Specifically the Lumix G3 as the newer generation likes the flip out screen.

Comments ?