The Lumix DMC-LZ40 has a CCD sensor type which is better than the MOS sensor type found on most cameras of this age and type. CCD sensors produce high quality, low-noise images but consume a lot more power than CMOS sensors. CCD is the most common image sensor type used in digital cameras.
A CCD sensor type is actually the best sensor type across all cameras of this age and type.
Across comparable types of digital camera the worst sensor type is MOS.
We compared this camera to all the other cameras that have a CCD sensor and we think the COOLPIX L120 ($260.00), and the 310 both from Nikon or the Olympus SP-620UZ which has better reviews is also worth considering.