Small is beautiful, or so it's said. Could this be true of a DSLR that's as small as a large compact?

Well, if you give the Olympus E-420 a chance, not only will you find it astonishing value, but its dinky size means you'll end up taking it everywhere with you.

This is the second small Olympus DSLR and looks and feels a bit like the legendary OM SLRS that propelled Olympus into one of the world's best-known camera brands.

Improved build

The E-420 has some improvements over its predecessor, the E-410. For starters, the build quality is very good. It's a small but perfectly formed body and very comfortable to hold, thanks to the addition of a finger grip on the front.

All the buttons and switches are well made and Olympus the E-410's cheap-looking mode and selector dials have been replaced with much better knurled knobs, which make the camera feel much more solid and a little more expensive.

In this test we used the new Zuiko 25mm f/2.8 Pancake lens. This slim-line prime lens makes the E-420 small enough to slip in a coat pocket and hardly any larger than the Camedia compacts Olympus was selling three years ago. It's a great lens for portraits, although the small screw-in lens cap is a bit of a fiddle and not very easy to put on or take off in a hurry.

New autofocus

The E-420 has a new Live View mode that includes an 11-point contrast detect autofocus feature with face detection. It's faster to focus than its predecessor but still not as snappy as the Live View focus in the new Sony A300 and A350 models. No matter, the conventional phase detection three-point autofocus is still on board and that's very responsive.

As well as the usual PASM exposure modes, the E-420 also features 18 scene modes, like a point-and-shoot compact. And it's the point-and-shoot upgraders that the E-420 is aimed at. It's the perfect stepping stone for making the jump from a compact to DSLR.

At its heart, the E-410 has a Four-Thirds NMOS image sensor with an increased dynamic range with about an extra stop or so over the E-410. The colours are superb with skin tones, landscapes and blue skies rendering well in JPEG. Auto white balance has been overhauled and we found it to be spot on, even in mixed lighting.