For best results, it's always preferable to output DTS-MA HD and TrueHD as a bitstream. This will guarantee you lossless audio through the appropriate receiver. However, if you're playing a disc with a Bonus View (Profile 1.1) PiP feature, you need to engage Secondary Audio in the sound menu. Doing this disengages hi-res audio on the main soundtrack and will default the movie to standard 5.1. To avoid confusion, keep the Secondary Audio 'Off' until you specifically want to view a PiP disc.

Taking a bitstream output will also remove all menu button sounds. Personally, I find these pops, clicks and whooshes annoying, so there's no loss there. If you don't have decoding for hi-rez audio in a receiver, the player should be set to PCM Out. This then reinstates all the button sounds.

Newbies maybe a little daunted with the setup, but basic usability can be considered good. Once I'd configured the menus, disc playback seemed straightforward.

Blown away by Blu-ray

I tested the deck with a variety of material and was generally blown away by its performance. Blu-rays are ruthlessly revealed, with the player offering stunning detail retrieval. What's more, this BD range is the first from Panasonic to offer a high level of DVD playback.

Upscaled SD is good – de-interlacing comes without penalties and weird artefacts. The deck sailed through Silicon Optix HQV benchmark tests for jaggies, and text crawls. The player's SD video response at 5.8MHz is scorchingly good.

At the heart of the player is a new 45-nanometre version of the brand's UniPhier video processing LSI chip, which incorporates both P4HD picture processing and the PHL Reference Chroma Processor.

This powerful chip draws upon much of the expertise derived from the brand's long-running Hollywood Labs authoring operation in LA.

Noisy pictures

One area where the BD35 could do with improvement is in noise reduction, but this comment applies equally to pretty much all BD players currently on sale.

Although we routinely eulogise the picture clarity of BD, software for the format often has levels of noise apparent in the picture which I would consider unacceptable.

The problem is that no one has produced a video processor able to distinguish between very fine detail and digital garbage. So while this player has two NR 'modes', these do little more than scowl fiercely and waggle fingers at the picture.

Heroes: Season 2 (Blu-ray) is particularly blighted by video noise and the BD35 is powerless to do anything much about it. The white plaster on Mohinder Saresh's hooter looks more like a speckled egg.

Considerably better is the encode of the Dark Knight Prologue on Batman Begins; this really is peerless – and the BD35 just eats it up. Texture, colour fidelity, three-dimensionality – I struggle to imagine a better picture.

Nearly as impressive is the BD release of Transformers. Chapter 8, a high-contrast sandstorm of exquisite detail and pulse-pounding lossless audio, is probably the best reason to buy into BD you'll see all year. Play it to your pals and they'll be scampering off to get themselves a player.

Panasonic's tweaking options

The BD35 offers a substantial number of picture and audio tweaks for demanding cinephiles. In the User mode, there's gamma and the aforementioned 3D NR and Integrated NR increments.

For CD playback, there's the brand's proprietary Remastering modes (which extract fine detail normally masked by noise) as well as a selection of AV presets (Night Surround and Virtual Surround) which should generally be avoided.

While the BD35's audio components are less refined than those in the BD55, the player clearly benefits from nigh-on identical build and chassis. As a result it can be considered a reasonable CD-spinner, too. Our labs measured audio jitter at a mere 181.9.ps.

On most budget/mid-range AV systems, I'd wager differences between it and the BD55 will not be apparent. The real cap on fidelity is not so much the components used as the actual physical build, which is common to both machines.

Extraordinary Blu-ray deck

One point I do think that could be addressed by Panasonic is the inclusion of a screensaver or visualiser that can be engaged during CD playback. The last thing I want to see on my plasma screen is the clunky CD playback menu burnt into the glass at the end of an audio session.

Overall then, the Panasonic DMP-BD35 is an extraordinary HD player: beautifully engineered and capable of terrific results. Audio visual quality is high, BD Java loading times are (relatively) fast and it's super slim too boot. What will Panasonic's rivals do now?