The J3 ($599.95 direct with 10-30mm lens) represents the third generation of Nikon's compact interchangeable lens camera system. It's a bit more mature in design than the J1, but no longer occupies the entry-level slot in the family. The smaller, less-expensive S1 is now the low-end body, ringing up at $100 less. The 14-megapixel J3 burst shoots at up to 60 frames per second, can capture slow-motion video, and has a couple of innovative shooting modes like Motion Snapshot and Slow View. It doesn't beat our current Editors' Choice Panasonic Lumix DMC-G5, which includes enthusiast-level features like a hot shoe and a built-in EVF, but casual shooters who are interested in a compact camera with some interesting features should give it some consideration.

Design and Features
Like its predecessor, the J3 is available in a number of colors. Out test camera was white, but it can also be had in black, silver, red, or beige. Regardless of the color you choose, the included 10-30mm (27-81mm equivalent) comes with the same finish. The camera measures a mere 2.4 by 4 by 1.1 inches (HWD), although the lens adds a couple of inches of depth when mounted. If you're the type of shooter who is interested in the improved image quality offered by an interchangeable lens camera, but don't think you'll ever buy an additional lens, you should also consider our Editors' Choice high-end point-and-shoot, the Sony Cyber-shot DSC-RX100SEE IT. Its image sensor is the same physical size, about 1-inch measured diagonally, and the lens is a faster 28-100mm f/1.8-4.9 design—you'll never be able to change lenses, but you can slide the camera into your pocket.

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The J3 is designed for automatic operation, but it does give you access to some manual controls. On the top of the camera you'll find the On/Off button, a Movie button, the shutter release, and a mode dial. Instead of the standard PASM modes, the dial has settings for Motion Snapshot, Best Moment Capture, Auto, Creative, and Advanced Movie modes. Auto Mode is just as you would expect—it lets the camera take control of shooting settings, although you will still be able to control the Drive Mode, adjust the Flash output, and control Exposure Compensation (which adjusts the brightness of shots).

Shooters who are less familiar with camera settings can tap the F button on the rear of the camera in Auto mode, it brings up a menu that lets you control Nikon's Active D-Lighting system to adjust highlights and shadows, control background blur via the Background Softening setting, adjust the shutter speed via the Motion Control setting, and control the Exposure Compensation via a setting labeled Brightness Control. Aperture control and Shutter Speed are still available via traditional methods when shooting in one of the camera's Creative modes, but for folks who aren't intimately familiar with photographic terminology it's nice to have these options presented in more basic terms.

Creative Mode opens up Shutter priority, Aperture priority, and full Manual shooting to advanced users, but there are also a number of scene modes contained within. These include preset modes for shooting in low light and when working against a strong backlight, as well as more interesting modes like in-camera panorama, a simulated miniature effect, and a selective color mode. The miniature effect blurs the areas above and below your subject, making the photo appear to be of a diorama, and the selective color mode lets you shoot photos that are black and white, with only one color of the spectrum present in your images.

The Best Moment Capture setting has two modes from which to choose. Smart Photo Selector debuted with the J1 and is unchanged—it captures a burst of photos at 60fps and chooses the best five.  Slow View starts when you press the shutter halfway down, slowing down the live view feed for about six seconds. This lets you capture an action shot at just the right moment. The Motion Snapshot mode is still there as well—it captures a still as well as a few seconds of surrounding video and combines them into a short slow-motion video and still shot with music.

You're going to rely on the rear display to frame and review photos. At 3 inches in size it occupies most of the rear of the camera, and it's extremely sharp thanks to a 921k-dot resolution. Unlike some other interchangeable lens cameras, like Sony's NEX-F3£599.98 at Amazon UK, the screen is fixed—the NEX has a tilting display. The F3 also supports an external electronic viewfinder add-on, a capability that the J3 is lacking. You'll have to move up to the more expensive Nikon V2 if you want an EVF.

The J3 uses an electronic shutter rather than a traditional mechanical one—again, you'll have to move up to the V2 to get a Nikon 1 camera with a mechanical shutter. On one hand, the camera is silent when you shoot. But you do lose the ability to take flash photos at higher shutter speeds—the J3 tops out at 1/60-second when using the flash, while the V2 will let you snap photos with a flash at 1/250-second. This won't be an issue for the majority of folks who are considering the J3.

There is a built-in pop-up flash, a feature missing from Olympus Micro Four Thirds cameras like the PEN Lite E-PL5. The J1 had a somewhat ridiculous looking flash that popped straight up from the body on a skinny neck. The J3 has a more traditional flash that raises using a dual-action hinge design. The nicest thing about it is its ability to fire from any position—if you want to avoid the harsh look of direct flash you can tilt it back and bounce it off of a ceiling for a softer, more pleasant look. The flash that is built into the Sony NEX-F3 has a similar hinged design.

There's no Wi-Fi built into the camera, but you can add it by purchasing the WU-1b Wireless Mobile Adapter ($59.95). It plugs into the USB port on the side of the J3, so it does add some bulk, but makes it possible to transfer images to your smartphone. If you're looking for a compact interchangeable lens camera with built-in Wi-Fi, take a close look at the Samsung NX1000SEE IT and Sony Alpha NEX-5R. Both let you transfer photos to your phone and to social networking sites, without having to plug in an adapter.