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My DMC-LZ7 started having the same "please replace batteries" error a few weeks ago (bought in 2007). It only seems to happen with my NiMH rechargables, though they test as full-strength with a cheap battery tester. Alkalines don't cause the error and I haven't tried Oxyride (ZR6) batteries yet.
The camera has two battery-type settings (Alkaline/NiMH
Are you using the batteries recommended by the manufacturer? that is a very important fact, even though you can find other batteries that have the same specs, they make the cameras to where it will work best, and sometimes only, with the batteries recommended.