WHAT'S HOT: Putting a 3.2-megapixel CCD in a camera the size of a pocket calculator ranks as a major accomplishment. Add to that a 3X optical zoom lens, and you have a camera you can take anywhere with no unsightly pocket bulge and no reason to miss a shot. Unlike the documentation some vendors provide, Minolta's English-only manual is slim and yet very thorough. The camera offers several audio options, including capturing movies with sound and appending images with 15-second audio notes. You can even record custom sounds to replace the camera's focus-confirmation and shutter-release noises (but beware: if the sounds are too long, they can slow down operation of the camera). You can customize two left-right buttons on the rear of the camera to handle exposure compensation values, white-balance modes, or a couple of other choices. The Xt mode dial--missing on the Dimage X and Xi, and used to switch between movie, still, playback, and setup modes--makes this model easier to use than its predecessors.

WHAT'S NOT: This tiny, thin camera comes with a tiny, thin battery, which didn't fare well in our tests. We got only 200 shots (a little more than 1 hour of life) out of it, putting it near the bottom of our test pool. For comparison, the Casio Exilim EX-Z3 took 269 shots and lasted 20 minutes longer, even though the EX-Z3 has a smaller body and a larger LCD display. The Xt's menus are harder to navigate than the menus of larger cameras: To enter the menu system, you press a menu button below the LCD; then you use the zoom and directional buttons in the top right-hand corner to pass through them.

Understandably, the Xt has no manual exposure settings, but it also lacks scene modes, which have become de rigueur for simple point-and-shoot cameras.

WHAT ELSE: Now that Casio has introduced a tiny camera with a 2-inch LCD display, we can rap the Dimage Xt for having only a 1.5-inch screen. The quality of the Dimage Xt's screen is fine, but its small size is not an entirely necessary compromise. Still, the Dimage Xt outscored the EX-Z3 on our image-quality tests by a small margin, achieving an overall score right at the average. Nearly all shots looked pleasantly sharp, though a few--especially a flash shot--looked too dark. The Xt even performed fairly well on our cropped-and-magnified shot, which is designed to test resolution: It outscored some other 3-megapixel cameras that were much larger. The camera has no formal macro mode, but it can focus on objects closer than can many other cameras that do have one. It can capture a TIFF image, too, though that capability seems unnecessary on a camera like this.

UPSHOT: Last year's original Dimage X set the standard for small digital cameras: It was the first tiny model with an optical zoom. The Xt improves on that design and is a fine choice for a take-anywhere pocket model. But we wish it had a larger LCD display.

SUMMARY

Minolta Dimage Xt 3.2 megapixels, 2048 by 1536 maximum resolution, 37mm to 111mm focal range (35mm equivalent), f2.8 to f8 aperture range, shutter speeds from 4 seconds to 1/1000 second, optical and LCD viewfinders, USB and video connections, 16MB Secure Digital media card, rechargeable lithium ion battery, 5 ounces with batteries; Minolta Dimage Viewer software. One-year parts and labor warranty; 8.5-hour weekday toll-free support. $349 201/825-4000 www.minoltausa.com