This feature-laden camera has lots of hidden talents. The 10-megapixel resolution provides room for cropping and has enough resolution for large print sizes. The Leica 5x zoom lens provides more quality zooming than most cameras of this size so you can zoom in to get the picture you want.  Add that to the 25mm wide-angle capabilities of the lens which is especially good for landscapes and large group pictures, and you’ve got a good all-around camera.

The CCD image sensor has a 4:3 aspect ratio and the camera also provides a true optical image stabilization. There is a burst mode that lets you shoot quick frames. You can perform in-camera cropping. The camera has red-eye correction and built-in face detection. The camera is PictBridge compliant so if you own a PictBridge compliant printer, you can print directly to the printer without a using a computer.

The beauty of this camera is that you can manually adjust all the controls, or you can let the camera do it for you. As with other cameras of this type there are several scene modes that will adjust the camera settings for you. The scene modes include Portrait, Soft Skin, Scenery, Sports, Night Portrait, Night Scenery, Self-Portrait, Food, Party, Candle Light, Fireworks, Starry Sky, Beach, Aerial Photo, Snow, High Sensitivity, Baby 1, Baby 2,, Sunset, Pet, and Hi-Speed Burst.

There is also an Intelligent Auto scene mode that automatically determines the scene you're shooting and optimizes the camera settings accordingly. In our testing, the Intelligent Auto scene mode worked quite well in most situations, but in low light the scene modes gave better results. We found that the camera had a somewhat weak flash. However, when properly adjusted, the camera was better than most of its competitors in low light situations. One thing to note is that the Intelligent Auto feature can be slow to determine the setting making it useful only in situations where you have plenty of time to frame the picture.

The Lumix 500 comes with a lithium-ion battery pack that is  rated as good for 280 photos on a charge. The camera also has a date/time stamp.

Another standout for this camera is that in movie mode it can take HD  movies. The HD mode records 720p video with a 1280x720 pixel frame at either 10 or 30 fps. You can also change the aspect ratio. The movies look okay on the camera screen, but it you connect the camera to a HDTV, they are surprisingly good. You can use the camera with both NTSC/PAL standard definition and component high definition video. You cannot zoom in the movie mode.

If you hook the camera up to a television, you can also display the in-camera slide shows of photos which are easy to create and quite good.

Image quality of the Lumix FX500 is good. As with most cameras of this type, noise starts to creep in at 200 ISO and above. We doubt that this can be rectified unless the manufacturers are able to build larger sensors into these cameras, which is a big challenge given their shirt-pocket size.

The camera reproduced colors very well and pictures were on the par with other camera of this type. As we noted earlier, the scene modes and Intelligent Auto mode produced nice pictures. And given the ability to manually adjust all the settings, we found that you could easily control your pictures.

Like most other cameras of this type all picture are taken in the JPEG format. The software that comes with the camera includes PhotofunStudio -viewer-, ArcSoft MediaImpression, ArcSoft  Panorama Maker, QuickTime, Adobe Reader and the USB Driver.