We are using the Zeiss C-Apo 40x water immersion lens with our LSM and it
works wonderfully.  The images are superior to that of the 63X 1.4 or 100X
1.4 oil immersion lenses, except possibly when you are looking at something
very close to the coverslip in the center of the field-- and I'm not
convinced of that yet.  Besides the advantage of being able to go deep into
the specimen with the C-Apo40X, the picture quality across the field
degrades very little, and water is also easier to clean up than oil.
 Although it is roughly twice as expensive as one of the oil immersion
lenses, you really don't need any lenses of higher magnification if you have
a system that zooms.  I have heard that the Nikon and Olympus equivalents
perform comparably.
 
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