Digital camera prices are continuing to fall, which is largely due to market saturation. Fortunately for consumers, it's now at a point where a good quality high resolution camera can be picked up for a little under $1000.

HP's Photosmart R707 goes further still, offering all this for $699. It's loaded with all the nifty features you'd expect to find on a more expensive unit, including: HP's Adaptive Light Technology (ALT); on-camera red-eye removal; five shot panorama, pop-up suggestions on taking better photos; and 10 shooting modes including action, landscape and low light.

ALT is HP's proprietary technology that's designed to reproduce the natural highlights and tones that the human eye sees by removing exaggerated contrast and compensating for reduced image detail when taking photos in partial shadow.

This is also the first digital camera we've seen to offer onboard red-eye removal rather than just reduction. This works by automatically determining the subject's eyes using a series of matching criteria, then boxing and displaying the image on the LCD. Correcting the red-eye is then simply a matter of saving your corrected photo over the damaged one. It's a handy little feature that is great for fixing red eyes without having to first transfer all your images to PC and then manipulate each image through software.

The supplied software bundle makes it easy to transfer photos and the inclusion of Panorama Maker 3.5 allows you to stitch together images you've taken in the five shot panorama mode or as panning single shots. Like red-eye removal, the R707 features in-camera software that removes the guesswork in taking panorama shots by providing a transparent silhouette overlay on the LCD when taking the next picture, allowing you to line it up with the previous shot. Our only real criticism of this camera is its basic 32MB internal memory, enough for 10 images in the highest resolution, which makes it absolutely necessary to purchase additional memory to stop you having to purge or download files often.

This great value for this much camera; 5-megapixel quality is likely to be more than enough for most users unless you have grandeurs of large format printing or reproduction. Overall, HP has made a camera that's comfortable, easy to shoot, and feature packed.