The 7.1-megapixel Canon PowerShot TX1, with an initial price of $499, is a hybrid digital camera with a high definition Movie mode. That means it can record 1280 x 720-pixel resolution videos at a smooth 30 frames per second. If you’re viewing it on the camera, though, it looks just the same as 320 x 240-pixel videos. You have to view the movies on an HDTV to appreciate the high quality. So if you don’t have an HDTV, don’t bother with this camera.

This digital camera aims to be the ultimate bridge between cameras and camcorders. It has 640 x 480 and 320 x 240-pixel video resolution, which is standard on most digital cameras. However, it adds sharp-looking high definition 1280 x 720-pixel video and a few more perks to the feature set. Optical image stabilization, stereo audio, wind filter, video editing, functional 10x optical zoom, manual exposure control, and the ability to snap full resolution still images while recording video make the TX1's Movie mode top of the line. No other compact digital camera in this price range comes close. The $499 Panasonic LX2 records at the high 1280 x 720-pixel resolution, but at a choppy 15 fps. The Sanyo Xacti HD2 is marketed as a camcorder with digital camera-like abilities. It records high definition movies and has the same odd handling and compact style. It offers 7 megapixels, 10x optical zoom, a folding 2-inch LCD, and adds a jack for an external microphone, but costs a whopping $700.

The TX1 comes with a 32MB MMCplus card that records an entire 6 seconds of high definition video. You’ll have to invest in a high-speed (at least 20 Mbps) SD, SDHC, or MMC card. If you don’t have a fast card, you can record only 10 seconds of video at a time. The TX1’s large MPEG files require more memory space than most Movie modes. Accessories are almost a necessity with this digital camera. The battery runs out after only 160 pictures, so you’ll need an extra.

The camera retails for $499, the battery for $59, and Canon sells a 1GB SD card for $69. That comes to a grand total of $627. Ouch. That’s quite a hole in the pocket for a point-and-shoot. To make matters worse, you know as soon as you buy this trendy device that Canon will come out with a newer, swankier version.

As a digital camera, the Canon PowerShot TX1 is average. It has Program (called “Manual” in the menu, but it’s really Program), Automatic, and 11 Scene modes. That’s not much variety to work with. It has a face detection autofocus system that works quickly and effectively. It finds faces and automatically adjusts the exposure and focus so they always look good. However, the more you zoom, the less reliable the autofocus system. The flash hardly lights up anything, as it only reaches 6.6 feet at best, and portraits are plagued with red eyes.

There isn’t much real estate on the camera body. It measures 3.5 x 2.4 x 1.1 inches and is designed to be held vertically. A tiny 1.8-inch LCD screen folds out and throws the balance off, so setting it on a table will likely cause it to tip. The screen can be rotated and is reminiscent of pistol grip-style camcorders. There are a few problems with the design, though. Handling is awful, horrible, and terrible! Did I mention it was bad? It’s difficult to hold, the controls are tiny, and the navigational joystick makes going through menus painful.

The Canon PowerShot TX1 is the first of its kind for this manufacturer and hopefully future models will be better. The TX1’s high definition videos look nice and smooth, but don’t last long because either the memory card fills up, the battery dies, or your hand cramps and drops the camera. The TX1 is meant to put high definition video and digital camera capabilities in your pocket. It does just that - but at the expense of your savings, comfortable handling, and still image quality. Are the tradeoffs worth it? Not for us.