Panasonic appears to have a winner on its hands. The Panasonic G3 manages to combine the best elements of the G2 and GF2 and as a result is a camera that is likely to find favour with many enthusiasts, especially those who like street and reportage photography.

While Panasonic has made strides in noise control and low light performance, the G3's strength is in its small size and high-quality images in 'average' lighting conditions.

Sometimes it's hard to put your finger on exactly what you like about the images that a camera produces and while the results from the G3 may not be absolutely perfect, they do have a lovely film-like quality.

Interestingly, we are told that the 16-million-pixel G3 doesn't replace the 12.1Mp G2, but the older camera is moving down Panasonic's camera line-up to occupy the entry-level position formally held by the now discontinued G10. Given the more compact styling of the Panasonic G3, it raises questions about the direction that Panasonic may take with future GF-series cameras - we are told that the line is set to continue.