From all the reviews I'm reading on both camera's it certainly seems for these 2 cameras that it really depends on what your shooting.
The LX3 certainly excells in low light situations and seems to have less noise at higher sensitivities over the 980 IS although I cant find any direct comparisons. I have seen direct comparisons with the LX3 Vs the G9 and even at one stop higher (ISO100) the LX3 has less noise. Although I would be interested to see how well the LX3 compares to the G10/980 IS as they both have the same sensors. I'm sure the Digic 4 in the 980 IS will help with noise.
The 980 IS is a fair bit sharper in good light situations and at normal ISO80 it gives better results over the LX3
The LX3 lets you save in RAW mode, this is good for editing later of course, but If I wanted to edit that much I would buy a DSLR. (This is my own opinion of course) I'm sure super fine jpeg would be fine for normal P&S pictures.
LX3 only has a x2.5 optical zoom, the 980 IS has x3.7 I think the LX3 is let down in this area but its not a huge drawback or anything.
LX3 can take HD video, the 980 IS cant. I'm not too fussy over this as I have an HD camcorder anyway, which of course will be far superior, but still very nice to have on the LX3
The 980 IS has a viewfinder and the LX3 does not, its quite handy to have, especially if the sun is glaring down on your LCD screen and you cant see very well, although I believe both the LCD's on these models are very good. I believe the LX3 has the better quality LCD screen.
Both the LX3 and 980 IS have manual controls, I believe the 980 IS is the first IXUS to have this control in their compact camera's, and also it has over 16 auto presets, so for someone like me who just wants to point and shoot this is very good when auto mode is being used. I used to have a Nikon D200 and to be honest, when setup and paired with great glass the shots were jaw dropping, but If I want to use manual I will, but for me, and especially with a P&S camera I'll use auto the most especially when I want to take a 'quick' shot, if I'm taking sceninc shots or landscape shots I will jump to manual, oh yes, before I forget the LX3 will take better landscape shots with its 24mm wide view, well when I say better I mean more coverage

I'm sure I read with the LX3 you can slot on another lens that will give 18mm coverage, which is good but then, for me its taking it away from being a p&s camera that sits in your pocket.
Image stabilisation on both camera's does the job its meant to do, so not much to say about them.
I think for normal, everyday shooting in normal light and with its better optical zoom and sharper results at normal ISO80 the 980 IS wins, when you start to go indoors and the light is not so good this is when the LX3 shines, it gives really good results and less noise at high sensitivity. I dont think the 980 IS is a poor choice in this respect, its just the LX3 is better.
For me, I'm swaying towards the 980 IS at the moment. It's also around £60 cheaper than the LX3.
Anyone any other thoughts ? Would be nice to hear from other LX3 or 980 Is owners to see if your thoughts are the same as mine ?