Compared to an ultracompact like the Canon Elph, the D-40 is the same width, about half an inch taller, and three-fourths of an inch thicker--still small enough to easily slip into a jacket pocket, and less than half the size of most compact models. Despite the tiny dimensions, Olympus packs a 4-megapixel sensor, 2.8x optical zoom lens, full manual controls, and a movie mode with audio into the camera's small plastic body. The trademark Olympus sliding clamshell cover turns the camera on and off, and also protects the lens, viewfinder, and flash when closed.

Images are stored on SmartMedia cards. A 16 MB card is included, which holds 16 images at default settings. If you want to take advantage of uncompressed mode and movie mode, or plan to take more than a handful of photos at a time, you'll want to get a 64 MB or 128 MB card. Like virtually all Olympus cameras, the D-40 has a flexible battery arrangement, accepting either a disposable lithium battery (one is included), or a pair of AA batteries (rechargeables strongly recommended).

This is a camera you won't quickly outgrow. If you're just getting started in photography, leave the camera in Auto. In this mode, taking pictures is as easy as sliding the lens cover open and pressing the button. As your photo skills progress, you can start taking advantage of the camera's advanced modes, including shutter priority, aperture priority, and full manual modes, plus manual focus, slow-sync flash, spot metering, manually adjustable white balance, exposure compensation, and more. The D-40 also comes with a remote control, making it easy to include yourself in group shots and it allows you to keep the camera steady in low-light situations.

For a break from taking pictures, spin the control knob to movie mode and you're ready to shoot mini-videos with sound. Though they don't have the resolution of camcorder movies, these clips of up to 30 seconds are perfect as e-mail attachments.

When it's time to transfer the images to your computer, the D-40 is a breeze to use. Connect the included USB cable between the camera and your computer, and the operating system (Windows 98 or newer for PCs, OS 8.6 or newer for Macs) will automatically detect your camera as an external drive, making picture transfers drag-and-drop easy.

If you can't decide whether to grab a full-sized digital camera for its advanced features or a tiny point-and-shoot for its portability, consider the D-40--it offers the best of both worlds.