The implementation of AUTO ISO varies significantly from brand to brand and even model to model within a particular brand. It very much depends of the camera's ability to control high ISO noise. In models with very good high ISO capability, the camera tends to increase the ISO much sooner depending on the shutter speed to prevent blurriness caused by camera shake in low speeds. However, in models where high ISO noise is an issue, they tend to reduce the shutter as much as possible before increasing the ISO. I don't know about the FZ35 but the FZ28 increases the ISO once the shutter reaches 1/15. Reason being the camera produces a lot of noise at ISO above 400. My G1 on the other hand, bumps up the ISO sometimes at shutter speeds below 1/60.