When we reviewed Sanyo's Xacti VPC-C1, we were quite enamoured with the hybrid digital camera and mini-camcorder approach. We were less impressed by the lack of features.

The VPC-C5 suffers from some of the same problems - but a great overhaul of styling, specifications and features without touching the price makes this a worthwhile purchase. The VPC-C5 houses a 5.26 megapixel CCD (charge-coupled device) with a 5x optical zoom and comes bundled with a generous 1GB SD storage card. This will save 302 high-res images and 42 minutes of MPEG-4 video at 640x480 and 30fps (frames per second).

There's a tiny rechargeable lithium battery and the bundle includes a remote control, a nice little case and a docking station with good software support in the shape of Motion Director SE 1.1, Ulead DVD Movie factory 3.5 SE and Photo Explorer 8.0 SE Basic.

At not even an inch thick, the VPC-C5 has been on a diet, and it's far more stylish than its predecessor. It's ergonomically satisfying and can be used comfortably by lefties and righties. The simple button layout won't scare off the uninitiated and, despite its svelte dimensions, the Xacti is surprisingly robust.

Shots are composed via the magnificent tilt and swivel 2in LCD, which copes well with all lighting conditions. This is the first time we've seen a camera offering audio recording to match camcorders - we made a recording, and you can't hear the mechanics whirr or the wind whistle. Impressive. It's also extremely quick to operate, and you can snap while you're filming so you don't miss a shot. Image quality is sharp, but not exceptional from a 5.26 megapixel CCD.