Meanwhile, I set about checking out its image making ability. And I must admit that I'm a little surprised. Panasonic is no Fuji ... they have never been known for their high ISO prowess. But their more recent efforts have been surprisingly strong as they eschew excessive noise reduction in favour of retaining a lot of detail. This makes a huge difference for someone like me, as I process every image anyway, so I am perfectly happy to process the noise away ...
A superb example of what it can do is epitomized by this flickr set. These images are impressive no matter what camera shot them ... but for it to have been a Panny compact, well that impresses the heck out of me. Here is an image from that set shot at 800 ISO ... and it's terrific. (Note: This is just a link.)
So ... with all this in mind, I set out to create an ISO ladder. This is a time honored test that puts crops together from identically shot images at each possible ISO. I set ISOs manually for these images and left the exposure on automatic. Compensation was set to 0ev, although they could have used more than that.

Those images are loaded through ACR with a bit of adjustment to exposure etc and ACR's NT applied. Almost none through 400 ISO, then more for 800 and 1600. What I note is that the ZS3 retains most of the detail and remains mostly noise free up to and including 400 ISO. This is enough for many concerts.
80 ISO

400 ISO

The 800 ISO image starts to show some smearing and chroma noise (color blotches.) Not fatal though ... as shown in the lovely image above.
800 ISO

The 1600 ISO image is pretty bad ... lots of grain and chroma noise ... too much for the image to look acceptable. Even on the web. But when you process it into black and white, it becomes perfectly acceptable because of the excellent detail retention (for a compact.)
1600 ISO

1600 ISO processed to black and white

I plan on taking it to some concerts on its own to see what it can do. It might just replace my Fuji F70EXR ... which is some kind of feat.
Edit: I just saw an excellent series of images from a KISS concert on the Panasonic Talk forum at DPReview. The fellow show shot them mentioned the minimum shutter setting to be used of 1/60s or 1/125s depending on how much they move. This pins the aperture wide open and the ISO at 400 (although you can set ISO manually.)
Interestingly, this is the moral equivalent of manual mode on other compacts, as all I use that for is to peg the shutter speed.
My conclusion, therefore. is that the ZS3 is an appropriate camera for concerts. Better video and audio than the F70EXR, excellent detail retention to 400 and even 800 ISO ... certainly better battery life. Wow ... look out Fuji.