I am having both Z3 and Z5, both are quite similar optically, size and functions, buy you pay $100 more for:
1. Face detection function: this is a very good feature because the camera auto set the focus & exposure to the human face detected.
2. 1 more Mega Pixel: but this is really nothing.
3. 1G XD instead of 512M
4. 1 extra third party battery
5. Easy selection of Natural + Smart flash for Z5 vs Z3: for Z3, you need to press few buttons and that selection is in-corporated in the "Anti-shake" button of the Z5.
6. Z5 has IR that can transmit picture to other Z5 cam, Z3 doesn't have the IR, but was not able to sent picture to PC, manual stated only can send between Z5s, don't know what is the use, why don't they make it to work with PCs??:think: Since they have in-corporated the IR, it is just the matter of software to make it work with PC.
Go for the Z5, don't be like me, thinking of saving some money to buy Z3, then couldn't sleep, keep thinking of what I have missed in Z5 and ended up buying another unit.:sweatsm: I got the Pink Z3 and Red Z5.