Editors' note September 29, 2010: We updated the review to reflect that the HDR feature is not part of Canon's "HS System," which is really just Canon's way of marketing improved low-light performance.
When Canon shipped its PowerShot S90 about a year ago, it made a big impression on advanced photographers. Tiny with a wide-aperture lens and all the essential manual shooting features, it was practically irresistible for dSLR luggers. It did have a few flaws, however, some of which Canon has attempted to address with the successor, the S95. These include a 720p video-capture upgrade, improved image stabilization, and some minor tweaks to the design and feature set. Performance, though, remains on the slow end of acceptable.
The image quality is top-notch for a compact, although it's a shame that Canon doesn't offer a less-compressed JPEG option. One of my photos shot in best-quality JPEG was about 7:1, but most of them come in at about 12:1 compression. There's a visible difference between raw and JPEG shots. (I suspect the problem is that bringing back the Super Fine compression in its PowerShots would slow the cameras to a crawl.)
That said, the S95's JPEG photos are exceptionally clean and relatively usable up to ISO 400; plus, you can probably squeeze out a stop more if you shoot raw. That's a lot better than your typical ultracompact. The lens is sharp and bright, but there's some asymmetrical distortion at its widest. Metering and exposure are both good and consistent. I found that the defaults pushed the color saturation excessively, though our quantitative test results report that the S95 has relatively accurate color; the neutral color setting is not available in raw+JPEG shooting. The colors are similarly overwrought in videos, but overall the movie quality is pretty good, and despite being tiny, the stereo mics produce a surprisingly full-bodied sound for a compact.
The S95's performance improves over the S90's in some respects; unfortunately, it falls behind it in others. With a time of 2 seconds, it takes about 0.2 longer to power on and shoot. It's about 0.1 second faster at focusing and shooting in bright light, but the same duration slower in dim: 0.4 and 0.7 second, respectively. For two sequential JPEG and flash shots, it's slower by at least 0.5 second, running 2.3 seconds for JPEG and 3.3 seconds for flash, compared with 1.8 and 2.5 seconds for the S90. That's flipped for raw shooting, however, with the S95 clocking at 2.6 seconds shot-to-shot vs. 3.4 seconds for the S90. Burst shooting rises to 1.9 frames per second, but at low speeds like that it's immaterial. I don't yet have performance data for the S95's competing models, but aside from the one exception of daylight shooting, the S95 feels like it operates at a leisurely but not overly frustrating pace. The image stabilization works well, but the fact remains that the battery life is pretty short.