A small sensor is critical to using an inexpensive lense to achieve things like 18x. A small sensor means high noise, and high noise means lots of noise reduction to suppress it. Noise reduction means loss of detail. With current technology, that is the basic equation.
There have been a spate of 8 Mp 18x optical zoom cameras coming out in the last couple of months. I've already read a review that says that the Olympus SP-560 UZ produces noisy soft images. I haven't seen much regarding the Panasonic Lumix DMC-FZ18 or the Fujifilm FinePix S8000fd.
Both of these cameras still have physically small sensors (1/2.5 and 1/2.35, I believe). Does the software in these cameras take care of the inherent noise problem in these small sensors? In particular, there are supposed to be multiple levels of noise reduction in Panasonic's "Venus Engine III." Does it really take care of the noise, or does it just manage to soften and/or smudge the image? Also -- maybe a stupid question -- do these software noise reductions only act upon the resultant JPEG file, or do they somehow also reduce the noise in the RAW file? I *have* read that the Leica lens in the Panasonic camera is pretty good. I just hope it wasn't wasted on the small sensor.
I am really disappointed that these vendors didn't see fit to put larger sensors in these cameras. I've been waiting for "the ideal" consumer digital camera (large zoom range, excellent image quality, small and portable size). My guess is that these came close, but that noise has not been adequately controlled.
Thanks for your feedback.