A few easy steps to making your life easier with MEGA O.I.S on Lumix Lenses attached to a GF1 or GF2.
To make MEGA O.I.S work on the GF1, you need 1.2 firmware or newer. To turn stabilization on, you go into Menu>Rec>Stabilizer. From there, you have 4 options: None, Mode 1, Mode 2, or Mode 3. Descriptions in detail on modes1-2 can be found here.
Mode 1: The image is continually corrected, so you can see the image clearly on the LCD.
Mode 2: Correction occurs only when you press the shutter release button, providing a greater corrective effect.
Mode 3: This mode continually corrects for up/down camera movement, and is ideal for panning action shots.
Basically,
Mode 1 = videos
Mode 2 = pictures
Mode 3 = panning shots
Keep that in mind and you'll get many more clean shots!
Hopefully that clears up some of the confusion on the MEGA O.I.S modes.
Cheers,