Olympus Pen E-P1 compact camera can do fancy tricks

— -- It's not a digital SLR.

It's not a point-and-shoot.

And it certainly is not a pen!

Olympus' new Pen E-P1 camera is a nostalgic beauty, reminiscent of classic cameras from the 1960s, but with all the digital bells and whistles of modern technology. It represents a brand-new camera format — "micro four thirds" — developed by Olympus and Panasonic. Basically, it lets compact cameras behave more like expensive SLRs.

Love point-and-shoot cameras but wish you could use interchangeable lenses and accessory flashes? That's the point of the Pen E-P1, as well as Panasonic's recently released Lumix GH1.

They can handle cool SLR features, such as shooting in RAW, which is an uncompressed image that can be finely tuned. And they can shoot high-definition video with better quality than competitors', such as Pure Digital's Flip or most consumer video camcorders.

Panasonic's micro four thirds cameras came out first, starting with last year's Lumix G1. Olympus was a little late to the game, introducing the Pen in July. Not that the wait is hurting the company. Olympus reports that the Pen E-P1 is back-ordered at most stores but says it continues to ship them.

To make sophisticated cameras smaller, the companies eliminated the mirror used on digital SLRs to view images through an optical viewfinder. Instead, you must compose and focus a shot on the camera's LCD screen, as with a point-and-shoot. That's fine for indoor shooting. But in bright outdoor sun, it's hard to see the screen.

(Panasonic's cameras do have an electronic viewfinder, which essentially offers a video rendering of what you're looking at, rather than the accurate color view of an optical viewfinder.)

The good news is that the image sensor — the most important part of the guts of the camera, which helps determine the ultimate quality — is dramatically larger in micro four thirds cameras than in point-and-shoots.

The 12-megapixel E-P1 sells for $799 with a small zoom lens (equivalent to 35 mm to 75 mm in film-camera lingo). That's about on par with what you'd get from entry-level digital SLRs such as the Canon Digital Rebel EOS T1i or Nikon D5000, which start at $750 and $729, respectively.

I brought the Pen on a two-week trip to Montana, Idaho and British Columbia, where it produced stunning high-def video in 720p resolution and terrific stills.

Still early for accessories

In looking at adding the camera to your collection, whether as a step up from a point-and-shoot or as a cool vacation camera, it's best to think of the Pen for what it can be down the road, not what it is today. Because compared with Nikon's and Canon's current offerings, it pales greatly.

The micro four thirds format is just getting off the ground, and accessories are slim. Only six lenses are available now, four from Panasonic and two from Olympus. You can use older Olympus lenses, but you'll have to spring for a $169 adapter, and the lenses need to be focused manually.

And there's no on-camera flash — a big drawback for a camera that appeals to point-and-shooters. Accessory flashes start at $199. (There's a $100 rebate if you buy when the camera is purchased, bringing the price down to $99.)

What I like best about the new Pen is the video.

Like the Canon Rebel T1i and Nikon D5000 and D90, the Pen shoots high-def video. But it adds auto-focus and zoom capabilities.

I also took a look at Panasonic's new micro four thirds entry, the Lumix GH1, a fun camera that happens to cost nearly twice as much: $1,499.

It's the successor to the $799.99 G1, and the big addition is high-def video in full, 1080p resolution.

Like the EP-1, the GH1 shoots high-def video in a point-and-shoot body, and the results are spectacular. Panasonic even gives you a stereo microphone to work with, something I've never seen.

Naturally, in a camera that costs so much more, you get some of the extras that I missed on the EP-1. There's an electronic viewfinder (basically, a mirror image of the LCD) and a twistable LCD screen.

But this camera doesn't have an on-camera flash either, a really odd omission for such a pricey device.

The GH1, in stores since June, is also hard to get. It's back-ordered at Amazon, B&H and Adorama. Panasonic says new shipments are en route to stores, and it expects deeper stock in September.

These micro four thirds cameras produce terrific pictures and even better video — and make great companions for vacation and travel photography.

They'll be an even better purchase in a few years, when the accessory choices get on par with Canon and Nikon.