In basic terms, the XZ1 is a small high end point and shoot that will compete with other 350-500 buck point and shoot cameras. It's got a single non-interchangeable lens with a 4-5 times zoom, a slightly bigger sensor than the cheap point and shoots so it should have better picture quality, can shoot pictures as close as you want and still do a decent job on longer shots.
The Pen series cameras are sort of a hybrid between a high end point and shoot camera and a full sized DSLR. The camera body itself is sized fairly comparably to some of the high end point and shoot cameras out there, and quite a bit smaller than most DSLRs. The lenses generally will make it a larger overall camera than the point and shoots, but you have the capabilities of changing lenses and can mount different lenses based on needs and budget. The Pen series cams have a significantly larger sensor (although not as large as the DSLRs) which should allow for better picture quality and less noise (just like stereos, some people just can't tell the difference, but it's there once you get the eye/ear for it). The time between when you click the shutter and the picture is actually taken should be much quicker, although apparently not as fast as most DSLRs.
Underwater, the XZ1 should have a much smaller housing and be a bit easier to carry around. The Pens have a bigger, although smaller compared to what's out there for DSLRs, housing in order to accomodate a couple of the lens options, and apparently there are third party ports available to accept other lenses as well. The point and shoots will generally have less expensive housings, the Pen housings are a step up in price, and DSLR housings will be spendier yet. The point and shoot housings often have wet add on lens options to eek out a bit more capabilities out of the point and shoots, the larger housings you usually change lenses (possibly ports as well) pre-dive based on the type of shooting you expect to do. There are limited wet lens add ons (macro at this point) for the Pen series housings as well.
In the past your choices were basically between some type of smaller point and shoot and the larger DSLRs, with the introduction of the micro four thirds cameras (such as the Pens and the G(x) series Panasonics) you now have something that blends the features of both. All are fine cameras, and choices can be made based on budget and size.