Which ultra-zoom digital camera is better: Sony DSC-H5, Canon S3 IS or Panasonic DMC-FZ7?

Here's a side by side comparison for these cameras:
http://www.dpreview.com/reviews/compare_...

You can also check out the in-depth reviews and users comments. As you can see, they are quite comparable - I would give Canon the edge for image quality, but the compact size of the Panasonic is also quite attractive as this is probably the camera that I'll take along.

The Canon S3, but only by a narrow margin. It's got the best optics and image quality of the 3 you listed, plus it's the fastest Auto Focus. All around a great camera. The Sony, style wise, looks cooler, and the Panny is quite good for the money...but overall, the Canon has it.

I can't comment on the Sony or the Canon but I can give you my experience with an older model of the Panasonic. I bought an FZ1 back in 2004 and was quite pleased with the 12x zoom, the image stabilization (the long zoom is useless without it), and the image quality. I have since moved on to a DSLR because I needed a camera with better low light capability (A dslr and lots of dollars worth of fast glass) but carry the old Panasonic when I don't want to carry the camera bag. Also, one of my friends has a newer model, I believe it is the FZ5 and he really likes it. All of that said one of the other two may be better but the Panasonic is certainly a good model if you happen to go that route.

Both the Sony DSC-H5 and Canon S3 IS are very good. It's just a matter of choice, but I think the Canon has a slight edge over the Sony.
I would never recommend Panasonic, because they all have 'noise', even at low ISO (80). This is a problem they continue to have with their sensors.