Ok, many reviewers state, that at High ISO the XZ-1 is best used with RAW as above ISO 400 detail goes to water color due to the noise filter.
On the eVolt e510/410 the same thing happens but you can turn off the noise filter in the menu and use jpeg happily. On my E-PL1 the jpegs are the best I have ever had and I got spoiled. The I got the XZ with that glorious Fast Lens and found the reviewers were right about the Hi ISO jpegs. I finally installed Olympus Viewer 2 to process the ORF files from the XZ-1 as my version of Silkypix Pro doesn't do them. I simply turned off the noise filter and raised the sharpness a bit. All final tweaks were done in Silkypix Pro; curves, contrast etc...
This is at ISO 640 where previously I found jpegs to be unusable! NO NR was done here at all.
More RAW converted using OV2 to convert then tweaking in SilkyPix
112mm-e, f2.5, 1/13 sec ISO 400 with VF-2
112mm-e, f2.5, 1/20 sec, ISO 640, using LCD