It’s not often we see a new type of digital camera introduced, but that’s exactly what happened in September 2008 when Olympus and Panasonic jointly announced the Micro Four Thirds format. Their goal:  to create a kind of cross between an SLR and a point-and-shoot.

Like an SLR, Micro Four Thirds cameras will accept interchangeable lenses, so you can switch from a wide angle to capture beautiful scenic beaches to an ultra-zoom telephoto to capture close-ups of the wildlife on the sand. And like a point-and-shoot camera, you’ll be able to line up your shots using the rear LCD screen instead of squinting through an SLR-style  viewfinder.

The other major goal here is to build cameras smaller than the traditional SLR, encouraging compact camera users to upgrade to Micro Four Thirds. Part of the camera-shrinking solution is to use physically smaller lenses. The other is to get rid of the flip-up mirror assembly used in a traditional SLR (digital or film), which allows for a much slimmer camera body.

The biggest technological hurdle to making the Micro Four Thirds format work is building a fast auto focus system. SLR makers offer a feature called Live View to let users frame their shots on the LCD screen, but the auto focus has always been too slow to capture fast-moving  action. That’s why auto focus was our top priority when the Panasonic  Lumix G1, the very first Micro Four Thirds camera to hit the market (and the only one for 2008) arrived at our offices.  We pointed and clicked, bobbed and weaved, turned down the lights and pivoted quickly from close-ups to long-distance shots. And much to our delight, the G1 kept up with us nicely, with no noticeable focus delay beyond what we expect from any other camera.

The look of the G1 is handsome but conservative: instead of venturing off in some dramatic new direction, Panasonic built something that looks like a miniaturized SLR. Even the color scheme is conservative, with basic black, a muted blue and a just slightly flashier red. Advertising for the camera stresses its small size, but it’s worth noting that there are several traditional SLRs that aren’t that much larger. The Panasonic Lumix G1 measures 4.875 x 3.31 x 1.81 inches (124mm x 83.6mm x 45.2mm) and weighs in at 13.6 ounces (385g) without a lens – quite compact and portable. The tale of the tape for the Canon Rebel  XS, though, a traditional digital SLR, is 4.96 x 3.8 x 2.4 inches and 15.9 ounces (126.1mm x 97.5mm x 61.9mm and 450g). Yes, it’s bigger,  but not by a whole heck of a lot.  We understand that size is easy to explain in an ad, but the camera’s major appeal for us is less obvious: the pure pleasure of pointing and shooting using only the live LCD display, with our choice of lenses and lots of photographic setting controls.

One high point of the camera design is the crisp 3-inch widescreen display on a pivoting hinge that lets it extend out from the camera body, and rotate vertically as well. That gives you lots of freedom to shoot at odd angles, whether looking down at the camera, over to the side or high overhead. The hinged display even lets you protect the screen by turning the screen side to face the camera and leaving the plastic back exposed to the elements.

The G1 is sold in a kit with a 14-45mm image-stabilized lens (equivalent to a 28-90mm on a 35mm camera).  A 45-200mm telephoto is also available. And when it comes to Micro Four Thirds lenses, th-th-that’s all, folks, at least for now. There is an adapter that lets you mount an existing Four Thirds format lens on the camera, but only a handful of these are compatible with the auto focus system, and we’re not big fans of manual focusing for every shot.  The built-in flash works well, and there’s a hot shoe for an optional external flash as well.

We were somewhat surprised by  the extensive photographic controls provided here. The auto mode works fine if all you want to do is snap the shutter, but the G1 also incorporates multiple ways to tweak color, saturation, sharpness and more.  In fact, we wonder If there aren’t too many potentially intimidating features for an audience which, presumably, will be moving up from point-and-shoot photography.

Performance (read in-depth lab performance at Digitalcamerainfo.com)
With few exceptions, the Lumix G1 did very well in our lab testing . Color and resolution scores are first-rate, white balance performance (the ability to adjust to different types of illumination) was perfectly acceptable, and the camera shot well under low-light conditions. Our only significant complaint involves image noise, that annoying grainy effect that’s particularly noticeable when you make big prints or blow up a small section of a photo. Noise levels for the G1 started fairly high and escalated rapidly. Several levels of digital noise reduction technology do lessen the effect somewhat, but even then we were disappointed here.

Comparisons (read in-depth lab performance at Digitalcamerainfo.com)
The Panasonic Lumix G1 is the first camera in a new format and, as such, carries what we consider a premium price at $800 for the body plus lens. The Canon Rebel XSi, one of our favorite consumer SLRs, is available for roughly $150 less and, unlike the Lumix, there is an incredible array of lenses and accessories available for the Canon. Same goes for Nikon SLRs, with the D60 a good choice at an aggressive price.  The Panasonic is smaller, but you’re still going to carry it around your neck or over your shoulder with a strap rather than tuck it away in your pocket the way you would with a compact point-and-shoot camera.

That said, we found a lot to like about shooting with the G1. It’s fast, it’s comfortable,  image quality is first-rate, and the combination of a flexible pivoting screen and effective Live View shooting while viewing the LCD makes this one fun camera to own.