The pancake lens has some disappointed over lack of sharpness, and not being as fast as the Lumix G 20mm f/1.7. While the comment about not being as fast is correct, I have found the 14mm to be very good optically.
The new kit zoom lens is said to be worse than the lens it replaces, the Lumix G 14-45mm f/3.5-5.6. While it is probably true that the old kit lens was better, I have found the new one to be good, too.
In this article, I have taken a look at how the lenses render out of focus parts of the image, the bokeh. I did this by taking the same image with both lenses. The lenses were focused on the checkered pattern in the lower right part of the image, which is about 30cm from the camera. (click for larger images):
Lumix G 14mm @ f/2.5
Lumix G 14-42mm @ 14mm f/3.5
The pictures were taken with ISO160, base ISO for the Panasonic GH2.
To better evaluate the images, here are 100% crops from the left, centre and top parts of the images, respectively. The images were taken with apertures ranging from f/2.5 to f/8:
(Click for larger images.)
Due to diffraction, one should avoid using apertures smaller than f/8, i.e., avoid larger aperture numbers. This is especially true if you are going to be studying enlargements from the images. If you plan on publishing the images in web size only, go ahead and use apertures as small as f/22. The diffraction will not be a problem if you are going to downscale the images that much.
I think this test does not reveal any bokeh problems with any of the lenses. Perhaps the test could have been made more challenging by having some strong highlights in the background.
The patterned textile in the first compilation image is in focus. We can see that it very sharp already from the smallest aperture. This appears to verify my initial claim that both lenses are in fact quite good, despite their rather bland reception.
The Lumix G 14mm f/2.5 pancake lens appears to be sharpest. This was to be expected, I think, since it is not a zoom, and hence has fewer optical compromises. Further, it also lacks an OIS lens group, and has a simpler construction with only six lens elements. The 14-42mm zoom lens has twice as many lens elements. Generally, more lens elements can lead to worse optical performance, for example reduced contrast. However, modern quality zoom lenses can retain superior optical performance with 15-20 lens elements.