All three of the Sanyo models featured in this month’s Labs share the same conventional pistol-grip design, and the HD700 occupies the middle ground between the affordable but flawed CG9 and the high-end HD1000, which wins our Recommended award.

It’s an unusual design but feels remarkably natural to use, and is far more comfortable to hold for long periods than a traditionally styled camcorder. The thumb hovers naturally over the record and still shutter buttons at the rear of the chassis, and the zoom rocker is handled by the same digit.

The design also makes the Sanyo one of the smaller models on test in this Labs – the HD700 can even be squeezed into a jeans pocket, a rather painful feat if attempted with the bulky Canon HG10.

At just $431, it’s the second-cheapest camera on test, so it’s forgivable that the 1280 x 720 resolution is less than some of the more powerful cameras featured, such as the Panasonic HDC-HS9, which shoot in Full HD at 1920 x 1080. To make up for this, though, the HD700 can take 7.1-megapixel stills shots, second only to the 9.1-megapixel CG9.

The quality of video from this small camera is surprisingly good, and although the headline resolution figure isn’t particularly impressive, the colours captured are authentic and bright. For its size, the camera performs well.

One problem we did encounter with the HD700 that limits it slightly is that the electronic image stabilisation is poor at preventing shake without degrading the image. This problem is partly offset by the unique way the camera is held, as this makes it easier to keep the unit steady than with a normal camcorder, but it’s all too easy to add jerky motion to video. It’s clear that if you want the best image quality you have to spend more money than this. But it can’t match the latter’s 10x zoom or internal storage, and that means as a budget option it just falls short.