FNP,

I checked out the specs on the TZ5A and one concern is that it only shoots JPEG files.

The DMC-LX2 shoots both RAW and JPEG. Dealing with RAW is an extra step, but provides a higher quality file since it is uncompressed. JPEG files discard some information in a file in order to make it smaller (compressed)..,

While fine JPEGs will reproduce very well in most publications, some editors will prefer that the the image be shot in RAW, then converted to JPEG or Tiff.

I'm not sure I understand the logic, but if you read writer's and photographer's guidelines from various magazines you will see.

I use the camera settings on the LX-2 that makes a RAW file and a JPEG file on each image as they are shot, I use the jpegs for email and the RAW files for preparing for images for publication.

I don't know what to tell you about the water drop, except that is happened and could happen again if the camera is used in heavy rain, or water is splashed on the camera while netting or playing a fish.