Image quality is probably as good as you need with any good quality camera in good shooting conditions. What you want is a camera that will give you that quality in the most situations.
The stabilization on the FZ20 lets you get sharp images in more limited lighting conditions without a flash or tripod, and that goes for the wider angles just as much as with telephoto shots. Maintaining f2.8 when zoomed also improves your versatility.
My only quibble with the FZ20 is that the viewfinder doesn't brighten in low light and it can be hard to frame a flash shot in very low light. The camera focuses fine, it is just hard to see what you are shooting. I like the very strong flash.
Have you looked at Steve's sample photos for the FZ20? Is the quality sufficient? Don't look at the color rendition too much. You can modify that in the menu for more or less vibrant color if you want it. I find it hard to tell the difference in photo quality between most 5Mp cameras taken in good light. The FZ20 has a decent lens with very little purple fringing.