The Panasonic DMC-FX500 is the flagship of the Lumix compact camera range. Announced in March 2008, it features 10.1 Megapixel resolution, a 3in touch-sensitive screen and a 5x optical zoom with impressive wide angle facilities equivalent to 25mm.

Wide angle coverage equivalent to 25mm captures a considerably wider field of view than the typical 36mm you’ll still find on many compacts. It’s also measurably wider than the 28mm equivalent coverage of the better compacts out there, and even most DSLR kit lenses. It’s not the first Lumix with 25mm – that honour goes to the slim FX35 – but with a 5x optical range, the FX500 has a longer reach at the telephoto end. Suffice it to say the lens also features optical image stabilisation to counteract camera shake.

Like the Lumix FX35 and TZ5, the new FX500 also sports High Definition video recording options in addition to the already decent standard definition options. The HD mode records 720p video with a 1280×720 pixel frame at either 10 or 30 fps, and the FX500 is also equipped with a port for an optional component video cable for connection to HDTVs.

The FX500 is the first Lumix camera to sport a touch-sensitive screen. This works in conjunction with the traditional Lumix joystick for controlling various aspects of the camera. You can select the shooting mode by tapping the required icon, adjust shutter speed, aperture or exposure compensation by dragging sliders with your finger or thumb, and autofocus on the desired area by tapping it. In playback you can tap on the area you want to enlarge and scroll around either by tapping ‘controls’ on each side or dragging it with your finger.

Speaking of shooting modes, the FX500 sports full manual control over exposure, along with aperture and shutter priority. This is an unusual degree of manual control to find on a compact, and there’s also adjustable contrast, saturation, sharpness and noise reduction.

Like its other 2008 models, Panasonic has also equipped the FX500 with its latest Intelligent Auto mode which combines a number of new and existing technologies to detect scenes, motion and adjust the sensitivity as required. This latest revision includes Panasonic’s own take on the dynamic range boosters seen on many recent DSLRs which reduce the exposure to preserve highlights, while brightening shadow areas. Interestingly Panasonic does this by actually adjusting the sensitivity in different parts of the sensor.

It’s an impressive specification for the Lumix flagship, but how does it measure-up in practice? Panasonic already has two compelling compacts in its current range with the Lumix FX35 and TZ5. Neither have a touch-screen, but the FX35 is slimmer while still offering 25mm coverage, while the TZ5 boasts a 10x optical zoom and a more detailed monitor.

In our full review of the Lumix FX500 we’ll be comparing the features of all three, along with taking a close look at the FX500’s image quality and touch-screen operation. Read on to find out if the FX500 deserves its position as the top model in the Lumix range, and as always, for a demonstration of its highlights, check out our Panasonic Lumix FX500 video tour.

Note: The Lumix FX500 is known as the Lumix FX520 in Asia, Australia and New Zealand; both models are identical other than the name. Also note some portions of the following review are based on our existing review of the Lumix TZ5, where some features are identical.