When the Canon PowerShot S2 IS first appeared, Canon clearly had a winner on their hands. And when its successor, the new PowerShot S3 IS, was announced, I anticipated some new wonders; however, a quick scan of the specifications revealed that the S3 was almost identical to the S2. The S2 camera has just about everything you could ask for in a digital camera so when it came time for Canon to design the S3, there wasn’t much more to add. This doesn’t make it a bad camera; in fact it’s a very good digital camera. Let’s look at what the new S3 has to offer.If you own an S2 camera and were thinking about upgrading to the S3, the big changes are that you’ll now get a 6-megapixel sensor and the camera’s color has changed from ray-gun silver to really cool gunmetal gray. Other improvements in the S3 include a new Sports mode, a slightly larger LCD, and more.

The PowerShot S3 is an image-stabilized compact camera that offers an ultrazoom (12x) optical lens and a 2″ LCD that twists out and away from the camera body. The most important part of the camera is its overall feel when you’re holding and shooting with it. The folks at Canon have used their design experience to create a compact camera that feels and performs like a digital SLR. This is especially true when it comes to the camera controls, which Canon has made accessible in the form of buttons on the body, rather than following the popular design philosophy of burying them in LCD menus. This means that it’s easier to make changes quickly when shooting. For those who like scene presets, you’ll find 20 of them covering a diverse range from the new Sports mode to Color Accent. When I was taking some sample shots, I noticed that the camera produced some chromatic aberration (also called purple fringing) at the higher zoom levels-not unexpected with an ultrazoom.

The Canon S3 is also a serious movie camera. The movies are recorded in Motion JPEG (AVI) with stereo sound (no kidding!). The quality of the movies that I shot (640×480 at 30 fps) equaled those shot with my camcorder. The difference is that in Movie mode, the SD memory card fills up pretty quickly. For example, a 1-GB SD card can hold about 8 minutes of video, so have a handful of the cards available if you want to include a lot of movie clips of your vacation.

The image stabilization (IS) works as well as its competitors’. Probably the greatest complaint that users have about IS is unrealistic expectations about what the feature can do. When shooting under low-light conditions, the Canon IS system allows you to shoot about one or two f-stops lower than possible without IS turned on.

The images that the camera produces are vivid and crisp. It has a pop-up flash that’s fairly powerful although it doesn’t pop up automatically. My complaints about the S3 are few: I was surprised to discover that it doesn’t come with rechargeable batteries (it runs on four AA batteries) and I found the LCD a little difficult to see on a sunny day. Another disappointment was that such a full-featured camera doesn’t offer a RAW image file format.

The camera has a $499.99 price tag but I was able to find it on the Web for as low as $424.

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