Not a compact, nor a digital SLR but a hybrid of the two, Panasonic was the first to bring such an interchangeable lens compact system camera to market - stealing an early lead on its Micro Four Thirds development partner Olympus - with 2008's original Lumix DMC-G1, quickly joined by the GH1, which added HD video capability.

Like its predecessors outwardly resembling a DSLR - but not technically one because of the removal of the mirror mechanism to bring lens and sensor closer together and enable smaller body and lens dimensions - the 12-megapixel Lumix DMC-G10, announced spring of this year in tandem with bigger brother the G2, hits the ground running.

Both the two new cameras now have HD video capture as standard with HDMI connectivity to flat panel tellies, but whereas the G2 features a dedicated button for its operation, on the G10 you need to select this feature from among the 13-strong options on its busy shooting mode dial.

Filming begins and ends with a press and then subsequent press of the main shutter release button. The G10 also offers the more widely accessible Motion JPEG video format, as opposed to the G2's adoption of the newer AVCHD. Both cameras feature the visually arresting film simulation plus My Colour digital effect filter modes that creatively give the Olympus Pen range with its Art Filters a run for its money.

Furthermore, whereas the G10's rear 3-inch high 430k-dot resolution LCD is fixed, the G2's screen is angle adjustable and features limited touch panel control. The G2 is heavier at 593g with lens, battery and card, to the G10's 558g with the same configuration (or 336g body only) - so the G10 is notionally more portable.

Like the G2, when gripped and with 14-42mm (28-84mm equivalent) standard lens attached, the cheaper G10 feels every inch like a consumer-level DSLR, and if you were none the wiser to the technology involved, that's what you'd technically believe it to be. Overall dimensions are a chunky yet manageable 124 x 83.6 x 74mm; but in truth this means that the camera with lens attached isn't actually that much smaller than an entry level DSLR with conventional APS-C sized chip.

The G10's body also features the same thin rubberised coating that aids grip whilst feeling silkily tactile to the touch - but unlike the G2 with its multi-coloured body options, this model is only available in studious black.

With both cameras looking otherwise outwardly identical, it's the above differences, convenient in the case of the G2 rather than essential, that means the G10 is the more affordable - one may argue, better value - option at £499 with 14-42mm lens. By contrast the G2 will set you back around £630 with the same. 

So while our above brief appraisal outlines why you should, or shouldn't buy the G10 over the G2, how does the former fare on its own, and in comparison with the rest of the market?

For starters its design, look and handling is much more conventional than immediate rivals in the retro Olympus Pen series from Olympus, and so you feel Panasonic is, as with its original G1 and GH1, taking less of an obvious risk in terms of getting consumers to accept something "new". The heart may favour the romanticism of the Pen, but the head will say Panasonic.

Shot composition on the G10 is via its superbly clear 3-inch LCD panel or electronic viewfinder above; offering a lower resolution at 202k dots to the larger main screen's impressive 460k. Image formats are JPEG, RAW and, covering all bases, simultaneous JPEG + RAW. You really do feel in handling the G10 that you are getting your money's worth, which cannot always be said of a relatively new technology.

In comparison with its predecessors, the G10 offers a higher maximum light sensitivity setting over the original G1, at ISO 6400 rather than ISO 3200, plus there's built-in flash to fallback on, as well as vacant hotshoe for accessory illumination.

Like Panasonic's compact snapshots the G10 features a dedicated iA (or intelligent Auto) button just behind the shutter release on the top plate for user friendly point and shoot operation, should fledgling photographers want to steer clear of the more sophisticated alternatives of program, aperture priority, shutter priority and manual settings.

Like it sounds iA recognises common scenes and subjects and automatically adjusts in-camera settings to deliver theoretically the best result possible under the circumstances. We've always found this setting reliably accurate for novice users on its compacts, and so it proves again with the more grown up G10.

Like iA, the Q.Menu button to be found on the back plate adds ease of use as well as being an exercise in time saving. Press this and the operational icons displayed across the top of the screen become active, so by tabbing through them with the camera's cross key buttons, changes can be made without having to scroll through the comprehensive menu folders. Though some of the other features mentioned may frustrate more experienced users, such shortcuts are always worth having whatever your level of experience.

In terms of image quality, the provided kit lens plays as large a part as the camera's 17.3 x 13mm CMOS (or Live MOS) sensor. This suffers from some barrel distortion when shooting at maximum wide angle, but edge to edge sharpness is well maintained rather than softening toward the corners. Otherwise images are colour rich - particularly if selecting "Expressive" colour mode - and crisp to boot. Compared with your common or garden compact, and non-interchangeable lens bridge models costing roughly £100 less, quality is superb.