Editors' note, December 20, 2012: The NEX-7 was awarded an Editors' Choice in February 2012, but the more recenthas surpassed it in most ways, and at a lower price. Thus we've decided to revoke the award for the NEX-7 -- which still remains an excellent camera -- and pass the torch to the NEX-6.
It may not be the ne plus ultra of interchangeable-lens cameras, but Sony's Alpha NEX-7 comes closer than almost any I've seen thus far. For this class of camera, the NEX-7 has almost everything: built-in flash, an OLED EVF, a large sensor, a tilting LCD, and relatively serious video features. Its innovative two-dial system takes the predominantly screen-based NEX operation and moves a chunk of it back to the hardware controls, where enthusiasts want it. It's got excellent photo and solid video quality and generally fast performance. And while the price is high for a nonpro model, given the package it doesn't seem ripoff-high.
As with many competing cameras the NEX-7's JPEG image processing could stand some optimization, but overall it delivers the photos you'd expect for the money, especially when coupled with a really nice lens like the Zeiss 24mm f1.8. (I tested with that, the 18-55mm f3.5-5.6 kit lens, and the consumer 50mm f1.8 OSS lenses.) The higher resolution of the NEX-7's sensor helps to compensate for the overprocessing, as the extra pixels help retain detail in the face of heavy luminance noise reduction (NR); that's one reason the NEX-7's JPEG photos still look much better than, say, the Olympus E-P3's. The irony is that the NEX-7's images have particularly well-controlled noise without any NR.
If you scrutinize the JPEGs, you can see some haloing on edges between dark and light (on text, for example) starting as low as ISO 400, and details become visibly mushier at ISO 800. The raw files, however, can look really good as high as ISO 1600, subject matter permitting, and remain quite usable as high as ISO 3200. Low-ISO-sensitivity shots look very good, natural with no oversharpening or artifacts.
On all other counts--exposure, color, sharpness, and so on--the photos look quite good. There's plenty of recoverable detail in dense shadow areas, but it doesn't seem like there's a lot in the highlights. Sony offers a variety of Creative Styles for color handling; the default Standard pushes saturation and shifts hues more than I like and Neutral looks a little too flat, but neither is too egregious and since you can adjust the contrast, saturation, and sharpness for each, they're definitely workable.
The video looks very good in decent light as well, sufficiently sharp with solid tonality and exposure, though cinemaphiles will probably take issue with the moiré and aliasing. I didn't see any rolling shutter, however, and casual shooters should find the low-light video quality acceptable.
While it's not superfast all around, the NEX-7 delivers good-to-excellent shooting speed overall. Under optimal conditions, it has class-leading shot lag, focusing and shooting in a mere 0.2 second. In low light that increases to a still-excellent 0.5 second. JPEG shot-to-shot time clocks in at a respectable 0.6 second, but that jumps to about 0.9 second for both raw and flash--meh for raw, good for flash. The camera bursts at about 3.5 frames per second with full autoexposure (odd, since it's rated at only 3fps). That's adequate for kids-and-pets-type action that doesn't involve sports, but more importantly, the EVF refreshes quickly enough to make burst shooting and panning comfortable. The autofocus adjusts quickly and quietly when shooting video.
In practice, I found the camera fluid to shoot with but with some mildly annoying performance lags. For instance, if you shoot with autoreview, as I frequently do, it takes a little longer than desirable to render the shot. There's a slight delay when autoswitching between the LCD and viewfinder. I hate the way Sony insists on initializing a database when you insert a card that hasn't been used in the camera before; I plan to format it anyway, and that always hangs me up. While this won't affect a lot of people, it will if you shoot with multiple cameras. I'm also disappointed with the low-light focusing system. If you enable the AF assist the camera automatically expands the AF area to almost the entire scene; that speeds up focus but it usually results in focusing on the wrong thing. If you disable AF assist, it hunts annoyingly before it finally locks focus.