The last couple of years have seen a change in the way electronics manufacturers approach designing their home theatre devices and plasma TVs; surround-sound systems and projectors are all more user-friendly than ever as they jostle for the consumer's attention. Panasonic has just released a new LCD projector that has more tricks up its sleeve than $3,899 should rightly buy.

The PT-AE700 LCD projector, successor to the highly regarded PT-AE500, is a high-definition (its native resolution is 1280 x 720) projector that impressed us when we saw a pre-production model few months. After spending a couple of weeks getting to know the PT-AE700 in a more intimate environment, we're happy to report back with nothing but praise for the little Panasonic projector.

The first thing worth pointing out is probably one of the most obvious and that's the little joystick right next to the lens. This is used to control the optical lens shift mechanism that moves the entire lens barrel both vertically and horizontally in order to obtain perfect image alignment with the screen without having to wiggle the whole projector. It's a great addition to the feature set in itself but is also worth mentioning for the fact it features movement along both the horizontal and vertical axes - most projectors only support vertical movement if any. Using the lens shift along with digital keystone correction and the 2x optical zoom means off-centre projection is easy and a boon for the sometimes imperfect home theatres our lounge rooms can make.

Still on the physical front, the PT-AE700 is also remarkably quiet (the notebook I'm writing this on makes more noise) and reasonably compact, although it's far from being the smallest projector we've seen. But the most important part - image quality - is also the PT-AE700's greatest asset.

We tried a number of DVDs to test the many different types of video the projector is likely to come up against during its lifetime and the PT-AE700 performed admirably across the board. Animated films like Monsters Inc showed off an expansive colour palette and didn't have to resort to over-saturating things to provide bright, rich colours while contrast and skin tones in live action movies were simply outstanding. Mystic River, for example, looked sharp and natural with tons of detail, and lines on actors' faces were clearly visible. And this was just using the S-Video connection; plug in using the component or HDMI inputs and it gets even better.

Panasonic has clearly put considerable effort into building this projector and for once all the marketing hyperbole seems to live up to the brochures. Smooth Screen technology is carried over from the AE500 to all but eliminate the screen door effect common to LCD projectors; it works well, providing beautifully smooth yet sharp imagery. A number of preset image modes are on hand to adjust the overall look of the picture, or, if you prefer to tinker, the Panasonic offers the amazing ability to colour correct more than a billion colours - individually - with Cinema Colour Correction (CCM). Contrast (another typically poor aspect of an LCD's performance) is very good, thanks to Panasonic's Dynamic Iris technology, which gives us better blacks without losing detail.

The upshot of all this new-fangled technology is simple: sublime image quality. Contrast, detail and colour are all top notch and as a longtime fan of DLP projectors I can honestly say this is the first - and so far only - LCD projector I'd choose over a DLP for home theatre use in this price bracket. It has superb picture quality, great features and is a veritable snip at $3,899 for big screen movie-watching. It's really very good.

Price: $3,899; Vendor: Panasonic; Phone: 132 600; URL: http://panasonic.com.au