A number of digital camera manufacturers are offering 12-megapixel models, currently the highest resolution available for point-and-shoots. Olympus entered the 12-megapixel FE-300 into the megapixel race in August 2007. The entry-level Olympus FE-300, among the least expensive of the bunch, retails for $299.99.

Stuffing extra megapixels into entry-level cameras is a tactic manufacturers use to lure consumers. However, more resolution doesn’t necessarily mean sharper photos. Our resolution test shows the Olympus FE-300 takes images that are sharp in the center but blurry in the corners. This will be apparent in large prints and images that have been cropped.

The camera has a laundry list of image quality problems. While noise is low when the camera uses low ISO settings, unattractive noise speckles images at high ISO settings. Additionally, the FE-300 did not perform well in our color and white balance tests, which means colors in photos will be inaccurate. Even more, the camera takes a sluggish 4 seconds to process a full-resolution image, so users might miss a spontaneous shot while the camera is “thinking.”

Aside from the high resolution count, the FE-300 camera has basic point-and-shoot features, including a 3x optical zoom lens and 2.5-inch, 230,000-pixel LCD monitor. The Olympus camera, however, is missing some crucial features found in competing cameras, some in the same price range.

The FE-300 uses digital image stabilization instead of optical or mechanical image stabilization. All three methods are meant to help prevent blurry photos caused by shaky hands, but their approaches are different. Digital image stabilization simply increases the ISO and thereby the shutter speed. In general, high ISO settings cause noisy images, and, as we mentioned, this is an area where the FE-300 performs particularly poorly. Mechanical and optical image stabilization are more desirable because they shift either the sensor or part of the lens to counteract the photographer’s movement. Some competing models, including the $299 Fujifilm FinePix F50fd, use the latter methods, a significant advantage

The Olympus FE-300 has face detection with a hyped Smile Shot mode that supposedly detects smiling faces, but the function is ineffective. Other cameras in this price range offer more built-in editing, like the Sony Cyber-shot DSC-W200, or high definition output, like the Kodak EasyShare V1253.

The Olympus FE-300 has some things going for it, including its flat design, which lends to portability. Geared strictly toward beginners, the FE camera has a helpful built-in Shooting Guide and Perfect Shot Preview, which displays thumbnail previews of multiple camera settings to assist users in their selection.

While the camera’s automated modes make it easy to use, the lack of manual controls might stunt a photographer’s growth. Similar cameras, such as the Fujifilm FinePix F50fd, offer Aperture Priority or Shutter Priority modes, which give the photographer more flexibility.

When considering a digital camera, consumers should be aware that more megapixels don’t necessarily mean the camera is better, and not all cameras perform the same. For instance, the FE-300 and Fujifilm F50fd are both 12-megapixel cameras, yet the Fuji fares much better in our resolution tests. While the FE-300 has a seemingly impressive megapixel count and is relatively inexpensive, it has poor overall image quality. There are much better cameras on the market.