The new Casio Exilim EX-M1 (sounds like "extra slim," right?) looks like the camera of the future. Barely bigger than a handful of business cards, the Exilim is a remarkably capable camera given its 3.5-ounce weight. The Exilim is small enough to keep in your pocket all the time, so you'll never be caught without a camera.

The Exilim features a 1.2-megapixel sensor and a fixed-focus, nonzooming lens equivalent to a 37-mm lens on a 35-mm camera. The fixed-focus design means there's no lens extension or focusing delays, so it's ready to shoot about a half-second after you press the power button. And when you press the shutter release, the Exilim snaps a picture without delay.

The built-in flash is weak, only useful with subjects 6 feet or closer to you—just the right distance for candid snapshots and group pictures. The Exilim's lens can't focus closer than 3 feet, however, so it has a narrow range to work in. The camera includes a 4X digital zoom, but images taken while zoomed in were grainy and lacked detail. The well organized menu includes manual settings for white balance and exposure shift, and the camera's controls couldn't be simpler.

The Exilim produced pictures that were very good for a 1.2-megapixel camera. Colors were vivid and accurate, and the Exilim's variable ISO sensitivity produced nice pictures in low light, even without a flash. Our test images didn't look great on the PC screen—especially when compared with the 2-, 3-, and 4-megapixel cameras in our roundup—but they produced perfectly acceptable 4-by-6 prints. The 1.6-inch TFT LCD screen is bright and sharp, even in full outdoor light. Unfortunately, the fixed-focus lens really limits the camera's versatility; we couldn't focus on the test target, so the camera couldn't complete any of our performance tests.

The Exilim comes with a USB docking cradle that does double duty as a charger for the camera's lithium ion battery. And battery life was very good, even though we used the LCD screen almost continuously. The model we tested includes MP3 record and playback features, and it comes with a built-in microphone for taking voice memos, a wired remote control, and a set of earbuds. The Casio Exilim EX-S1 omits these features for $50 less.

With its tiny size and way-cool cachet, the Exilim is a great yet pricey party camera. But if you're looking for sharp picture quality, you'll be disappointed.