Blue Breeze (dpreview, Panasonic forum, 25 February 2004)...
I was using Mode 1 (Stabilizer is always active) for quite sometime and getting great sharp pictures. But now I keep in Mode2 for two reasons.
First it only activates when you fully press the shutter, so you save a bit of battery power.
Secondly, the stabilzer is centered or balanced at the time you press the shutter. This will give you more stabilzation flexibility (horizontal and vertically). It is more effective when using zoom including digital zoom.I also only use Mode 2 because it is easier to use when focussing manually. When turning the manual focus ring, the middle of the picture is magnified, helping the FZ10 user to see the middle of the picture. I do not stop breathing when I am focussing, so the magnified image is usually gently `swaying'. In Mode 1, the `swaying' of the central magnified image is slightly behind (i.e. out of phase with) my body movement, which is distracting.