In real world use, the micro 4/3 sensor is much closer to APS-C than to compact cameras in terms of high ISO performance, dynamic range and DOF control.
But you probably have to use the fast primes, rather than the kit zooms, such as the Panasonic 20mm f/1.7 and the Olympus 45mm f/1.8, to get the shallowest DOF out of the sensor.
I've had an LX5 for a long time but never really warmed up to it much because of the "compact camera look" (low DR, super-deep DOF). Since picking up an EP2 I've been really happy with it as my casual photography camera, since it's so much better at that.
I save the LX5 for a backup camera when I need an all-in-one compact camera, and also for casual video recording in HD without having to fuss with manual focusing all the time.
If you're a shallow DOF junkie or you like shooting in darker places (higher than ISO 400), you should probably turn you attention to the micro 4/3 and APS-C mirrorless cameras. The difference between micro 4/3 and APS-C is not as great as you might think, and the smaller lenses makes for a more compact package (vs Sony NEX) even with marginally faster lenses. If you get a compact camera or the tiny sensor mirrorless (Nikon 1, Pentax Q), there'll be pretty big compromises in terms of image quality coming from an APS-C DSLR in terms of DOF control (though high ISO is apparently good on these new cameras).
Anyway, I'm linking some photos by m4/3 and LX5 so you have an idea of what they're really like in real use.
Here are some photos with the EP2 and 20mm and 45mm lenses, pretty close to APS-C DSLR output eh?
In comparison, here are some from LX5, pretty bland to me
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