I'm not going to give up my DSLR cameras quite yet, but I love my GF1. Just got it last month (I know, late to the party as usual), and it's been a blast. It's the perfect everyday-carry camera, great for travel, tourism, and it fits nicely in my briefcase so I always have a camera at work, even when I leave the big cameras in the car. With the 20/1.7 I can shoot most anything I want and get good results.
In my work, the image quality is at least as good as the files from the 40D. Not as good as the 1D Mark IV, but then I wasn't expecting that. I treat it like an old Leica CL with the 40mm lens -- shoot at f/2 most of the time, using the EVF and the smallest center focus point. Pick the best camera position, and crop later as required (like the old days....) Getting some really nice results.