I bought the XZ-1 for my wife last year just before a family holiday, to replace an old Minolta S-414 (which was junk in my opinion despite some favorable reviews). At the time we were comparing against the S95, and the XZ-1 had just come on the market. Based on reviews I had already decided to get the Canon, and only found out about the XZ-1 at the last minute. I tracked down the only store in town that had one in stock and bought it the same day.
The XZ-1 is an awesome compact camera. The image quality never ceases to amaze me. What really swayed me over the S95 was the lens - f/1.8 at the wide end and still f/2.5 at full tele. The S95 was almost as fast wide, but shrank to a mediocre f/4.9 zoomed in. I thought that might make the difference between a shot and no shot in some conditions. The Olympus has a little more reach than the older Canon too. The macro capabilities of this camera are also excellent, AF seems to work well, and it exposes more consistently than my 5D2.
Now, had the S100 been on the shelves when we made this purchase, we might have made a different choice. The extra range of the zoom, especially the availability of 24mm equivalent WA, might have tilted the balance. (The Canon is still dog slow at the long end though - now up to f/5.9
). But my wife actually preferred the handling of the S95, it was my daughter and I who talked her into the XZ-1. So if I was buying another and the size was an issue, I would definitely to a serious look at the S100. We've been extremely happy with the Olympus though, and I have no regrets.
I'd agree that the user interface is not the best. We got ours stuck in some funky picture mode and it took quite a bit of scouring through the manual to figure out how to get it back to normal. A point-and-shoot camera, even a high-end one with lots of features, just shouldn't be that hard to use.
It is also a bit on the bulky side compared to the Canon offerings. Not usually a problem for us, as it is usually hanging from someone's neck or tucked into a compact shoulder bag. But if you want a camera that really could be stuffed in a pocket, the XZ-1 would not fit the bill as Neuro said.