I still have my great little LX-3 and didn't find enough things different to move on to the LX-5. A question for me: is the LX-7 that much better than the LX-3? More research is in order...
Hard to say - I never had an LX3 but loved the LX5. I knew some folks with both thought the LX5 lost a touch of sharpness compared to the LX3, probably because the zoom range was extended at the long end. I was always more than OK with the sharpness of the LX5, but it sounds like it lost a little bit relative to the LX3. Otherwise, I think the primary improvements were handling.
I expect the LX7 will offer even better handling than the LX5. I know when I was using the LX5, I'd be constantly clicking the click-wheel to move between aperture, exposure compensation, and manual focus distance, and sometimes got confused with which function it was on, which could lead to all sorts of stupid adjustments I didn't mean to make. That was the one thing I found really irritating about that camera - otherwise the handling was wonderful with all of the controls in just the right places. The LX7 looks like a HUGE improvement for me, with both the aperture ring and the separate little control for manual focus/ND filter on the back. That means I'll mostly only have to use the click wheel for exposure compensation and occasional ISO changes. But I won't have to CLICK it at all and try to remember where I am in its cycle of functions. To me, this is an incredible/amazing/overwhelming improvement - to others probably not so much.
The question will then become will the new sensor lens combination in any way improve the IQ or at least hold steady with the LX5. I think its the same basic sensor switch Canon did when it went from the S95 to S100 and I think that sensor got rather better reviews (although that camera seems to have ongoing problems with its lens). It seems to handle higher ISO better than the previous generation - not sure about DR or noise at base ISO. So if the LX7 at least holds even with the LX5 (or hopefully even improves on it marginally), paired with the faster lens, I'll probably end up getting it. Despite the RX100's larger sensor that camera leaves me cold for a few reasons, that are again probably specific to me rather than any sort of flaw with the camera. I'm also guessing the LCD on the LX7 will be an improvement in bright light over the LX3/5 and, to the extent it still leaves something to be desired, Panasonic's new EVF is worlds better than the one the LX5 used and probably worth the $160 for those occasions.
To ME, its likely worth the upgrade from the LX5 if the IQ even holds up, let alone if it gets better. Whether that's reason enough for YOU from the LX3, you'll have to let us know....
-Ray