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Photos: Panasonic Lumix DMC-G1 does lenses, but no video

We've got our hands on the innovative Panasonic Lumix DMC-G1, the first compact camera with the interchangeable lenses of a dSLR, and we're impressed

Today's Crave is a game of two halves, because we're looking at the first compact camera to split into a camera body and interchangeable lens: it's the Panasonic Lumix DMC-G1. We've seen some leaked pictures to give us a sense of the G1's scale, but having got our hands on the little fella for the first time at a launch event at Wembley Stadium, we can finally appreciate just what how groundbreaking the G1 is.

It's the first production model to use the Micro Four Thirds system, jointly developed by Panasonic and Olympus. It has the same size image sensor as the Four Thirds SLR format, but has a smaller lens mount and does away with the mirror, prism and optical viewfinder arrangement that makes up the Single Lens Reflex system. So not only is it smaller, it also cuts down on the wear and tear of having moving parts inside.

So what jumped out at us using the G1 for the first time? We were extremely impressed with the full-time live view feature. This means that instead of flicking between live view on the LCD and an optical viewfinder, you choose between live view on the 76mm (3-inch) screen or on the electronic viewfinder. The screen is bright and clear, and even better, so is the EVF.

Showing 60 frames per second makes movement smooth, and lines aren't as horribly jagged as some EVFs we've seen in the past. Another friendly feature is a sensor that automatically switches to the EVF as you hold the camera to your eye. Aperture, shutter and other shooting options are previewed on screen, taking the guesswork out of manual exposure.

But what doesn't it do? Most glaringly, the G1 doesn't offer video -- at all. Panasonic's presentation promised high-definition video as part of the G-system roadmap, but the G1 won't even stretch to a grainy VGA clip for YouTube. Alright, so video has always been a bonus on a stills camera, but with even dSLRs offering this function these days, it's a heck of an omission.

The G1 will go on sale for a recommended retail price of £600, but we seriously doubt that you'll have to shell out quite that much when it becomes available from 1 November. Panasonic is discussing a £50 cashback scheme and half-price lens offer, but these are yet to be confirmed by retailers. The big question is, who's going to buy it? Panasonic believes there's an untapped market of people interested in dSLR power without the size. Many Cravers are unconvinced, but we think this type of camera has the potential to carve a new segment from the superzoom and entry-level dSLR market. Certainly, there's everything to play for.

For a proper look at this innovative camera, and guest appearances from one celebrity and one would-be gatecrasher, click through the links to see more photos from the G1 launch. -Rich Trenholm

And here it is with the lens in place. Although it's very, very light, and pretty thin, the G1 is wider across the front than we'd expected. We suspect this is partly to accommodate the large 76mm screen and also to provide a decent handgrip at the front. We'd say it's definitely smaller than any dSLR we've seen, and size-wise is much closer to superzoom territory.

These are the two lenses available at launch: the standard and telephoto. Further lenses will follow in the spring, including a longer telephoto lens and a wide-angle lens.

Although it's not been confirmed by retailers, Panasonic is mooting a scheme to buy a second lens at half price.

CNET video monkey makes valiant attempt to sneak into Crave story while demonstrating the G1's excellent camcorder-style fold-out screen. Nice try, fuzzball.

We're at Wembley stadium, spiritual home of world football. What's Jamie Redknapp doing? Gary Stevens is busy? Chris Malkin? Oh all right, blokes like cars, let's get Vicki Butler-Henderson. Ooh, she's lovely.

And the money shot: a Four Thirds dSLR chopped in half on the left, with a Micro Four Thirds G1 chopped in half on the right. This really gives you an idea of just how much space is saved by the removal of the moving parts.

Incidentally, that's Wembley stadium in the background, but we weren't allowed to photograph it, so pretend you didn't see that, right? Thanks.