The Good: Image stabilization; large zoom range for its class; solid image quality, three burst modes; easy operation. The Bad: Few manual settings; no audio capabilities; low-res movie mode. The Bottom Line: This compact camera combines good photo quality, optical image stabilization, and a long 6X zoom for a bargain price. Priced about $50 less than its 5-megapixel Lumix DMC-LZ2 sibling, this affordable point-and-shoot offers the same 6X zoom lens with a 37mm-to-222mm reach (35mm-camera equivalent) and the same highly desirable optical image stabilization to counter shaky hands at slow shutter speeds or high magnifications. Panasonic trimmed about a million pixels to create this 4-megapixel version, but its image quality is almost as good as the higher-res model's. The only key feature missing is a microphone to record video sound clips. Carryover features from the Lumix DMC-LZ2 include a sturdy 8.5-ounce plastic body measuring a compact 4.5 by 2.5 by 1.3 inches, a serviceable--if coarse--2-inch LCD, and simple, almost menu-free operation. Like its sibling, the Panasonic Lumix DMC-LZ1 has no optical viewfinder. Eight scene modes--two of which can be conveniently preset to mode-dial positions--exposure compensation, and exposure bracketing remove some of the sting from the absence of enthusiast-friendly manual controls. The Portrait, Sports, Scenery, Night Scenery, Night Portrait, Fireworks, Party, and Snow Scene options are supplemented by a Simple mode that locks in settings suitable for a wide variety of shooting situations. Most of the decisions you can make--including selecting self-timer, flash options, picture review, EV tweaking, information display, and your choice of three burst modes--are available via the four-way cursor pad and a pair of back-panel buttons. The Menu key provides access to less commonly changed settings, such as ISO; white balance; image quality; and five-point, three-point, single-point, and spot focus zones. Using one of the two optical image stabilization modes, which operate either continuously or at the moment of exposure, produces sharper pictures at slower shutter speeds when you're taking telephoto, macro, or low-light shots. You can switch image stabilization off when you don't need it. Like its slightly costlier stablemate, the Panasonic Lumix DMC-LZ1 relies on evaluative metering to set exposures from 8 seconds to 1\/2,000 second at f\/2.8 to f\/4.5. Unfortunately, this camera's motion-picture features are particularly anemic: there's no microphone for recording audio, and resolution is limited to 320x240 pixels at 10fps or 30fps. The Panasonic Lumix DMC-LZ1 equaled the LZ2 in most performance categories, with an unimpressive 4.6-second time to first shot and intervals between photos of about 2 seconds without flash and 5.6 seconds with flash. Three continuous-shooting modes are available: a low-speed mode that racked up 4 shots in 1.7 seconds at full resolution; a high-speed mode that gave us nearly 4fps at 640x480 resolution; and a MegaBurst option that captures full-resolution shots at about 1.5 frames per second for as long as the memory card holds out. Shutter lag was acceptable but not especially short at 0.8 second under high-contrast lighting and 1.1 seconds for non-lamp-assisted snaps under challenging low-contrast illumination. The LCD worked best under bright illumination indoors, offering a less than ideal view in dim light or full sunlight. This camera's images were almost as good as those produced by its 5-megapixel sibling. It suffered from the same cyan fringing but otherwise produced good-quality images with lots of detail in both shadows and highlights. We noticed a slightly greater tendency to blow out highlights. The Lumix DMC-LZ1's ISO 64 minimum sensitivity is a tad lower than the LZ2's ISO 80, but both produced little noise at their minimum setting and still captured acceptable images when cranked up to ISO 400. Automatic white balance didn't do a very good job under incandescent lighting, and colors were lacking a bit in saturation both indoors and out. Happily, the red-eye-prevention system left only a hint of crimson in the pupils of our human subjects.