At first glance you might be tempted to think that the GH1 supplants the G1, knocking that model to one side, but that's not necessarily the case. You see the additional "H" in the name is all about HD video. We got our hands on the new GH1 at the UK launch and took it for a stroll around Windsor.

The GH1 adds Full HD video capture and in doing so makes a few small changes to the original model. Externally things are pretty much the same, however, you'll now find an icon for Movie mode on the top dial, a record button on the rear and the addition of the stereo mic, neatly sitting atop the pop-up flash unit.

There is also a minor change to the connections hiding on the left-hand side of the camera, presumably to better handle the transfer of the video content to your PC. The Mini HDMI resides under the same flap as in the G1. There is also a small styling change around the shutter button, but that's about it.

Of course, the real change is the range of possibilities that adding AVCHD video to your camera brings. The Micro Four Thirds system actually lends itself very well to video, because unlike conventional DSLRs, you can use either the screen or the viewfinder when shooting video.

For those that don't know, Micro Four Thirds knocks out a lot of the bulk of the camera by doing away with the mirrors, prisms and gubbins that a traditional SLR needs to give you your TTL image. So the GH1 (like the G1) has an electronic viewfinder. Unlike the sort of grainy EVF you've probably experienced on camcorders or superzooms in the past, this one is surprisingly comfortable to use.

But unlike some of the other DSLRs that support video capture, the nice thing about the GH1 is that you can punch the record button and it just starts taking video at any time. It is limited to 29 minutes, as is often the case with cameras.

The GH1 gives you a great range of controls for video too (we didn't get the chance to play with all of them); you get continuous focusing, aperture and shutter controls to help you get the creative results you are after. Those after that movie look will appreciate the 24p shooting in Full HD.

Obviously we didn't have long with the camera and the models that we were using were preproduction, so things will be slightly improved in the final versions. However, the video that we shot was beautifully crisp, with great natural colours.

The autofocus was easily fooled though – partly a case of guessing the tolerances of the system, something that you would pick up with a little time. What did seem to be unusual was a pulse of focusing with the press of the record button despite being in focus for the stills already, presumably as the system switched over and wanted to confirm the scene was in focus. We noticed this on every video we shot, but this might be improved with the final software.

We also found that the placement of the record button on the back means you tend to squeeze the handgrip when you press it, so we were constantly clicking the dial on the front at the same time – something to watch out for.

The audio is pretty good too thanks to those top-mounted stereo mics. They do feature a wind cut function and we were filming on a windy day. We wouldn't expect miracles and the wind is still very obvious, but as a general mic it works pretty well - we could hear the trickling of the water feature that we shot for example.

Panasonic are already a step ahead in this department and you can use an external mic, something that adds a lot of value to the GH1. They are selling accessory hot shoe mics – we tested the DMW-M51 – which cuts wind much more effectively. If your audio is going to be important, then this is the way to go.

The GH1 comes with the new Lumix G Vario HD 14-140mm (28-280mm in 35mm speak) lens. This does add quite a weight to the camera over the original G1 kit lens. But as a kit lens it gives you a great deal of flexibility in terms of zoom, the sacrifice being speed, so for lower light conditions you might need to look for something faster.

Panasonic boast about their Mega optical image stabilisation, which carries through to their new lenses too. Designed with video capture in mind, you'll find silent focusing so you don't get that customary whirr in your audio track as the focusing motors grind along.

Panasonic aim to release 3 or 4 lenses in the coming year, as well as having just launched a lens mount for Leica M and R lenses, to join the existing Four Thirds mount, so you do have plenty of choice here.

Operation of the GH1 as a stills camera remains very much the same as the G1. It is simple to use, but still packs in the full range of manual, aperture and shutter priority controls that you'd expect on an SLR, as well as the simple colour options that make it a breeze to add some creative elements at the camera end rather than in post production.

The screen is hugely flexible, folding out and swivelling so low angle shots are comfortable and the system is much more flexible than some of the current crop of fixed screen DSLR rivals – a distinct advantage to this setup along with overall weight and size.

Price when reviewed:
First Impressions

We didn't have long with the new camera and it was a preproduction model so there will be some more tweaks to the software before the retail version is released, but from what we’ve seen, it looks like a hot little number.

Given that you have the full advantages of the small format of the G1, but now packing in a range of HD video options that perhaps give you more flexibility than other current HD video-packing SLRs, this should appeal to those who want a little more from their video than just point-and-shoot.

The compromise comes in the form of price, of course. The G1 was more or less competitive as an SLR (you can get it for under £500 online), the GH1 comes in at £1299, a considerable jump.

The question is really how much value you add to HD video. For those looking at buying an SLR and a camcorder with wider creative controls, then the GH1 might be an appealing option, especially if you need to keep things compact for travelling.

The other consideration is that the Mirco Four Thirds will get much busier this year with the Olympus offering arriving soon and Samsung gearing up their own offerings, but with Panasonic's history in video capture, we're not sure whether these rivals will match the video options offered by the GH1.

We'll be looking at the GH1 in detail when we get a retail version in for a full review.