The Panasonic LUMIX DMC-TZ8 is one of the most versatile compact digital cameras on the market: it has a 25mm wide angle lens with a 12x zoom, a 12.1-megapixel sensor and manual exposure controls. It also packs optical image stabilisation, comprehensive and accurate focus modes, as well as high-definition video recording. The problem is that the Panasonic LUMIX DMC-TZ8's image quality isn't great; in fact, it's not an improvement over last year's excellent Travel Zoom camera, the LUMIX DMC-TZ7.

Both the Panasonic LUMIX DMC-TZ8 and the older LUMIX DMC-TZ7 have the same sensor size (1/2.33in) and focal range (25-300mm), but the DMC-TZ8 packs in 200,000 more pixels. The higher-resolution images aren't as crisp-looking as the images taken by the TZ7 at 10-megapixels, and its mid-to-high ISO performance is of low quality, too.

When shooting in low-light situations, the Panasonic LUMIX DMC-TZ8 will produce dirty images, especially if an ISO speed of 400 or higher is employed, but even at ISO 200, there is some discolouration in dark areas. The camera has an ISO limiter so that you can tell it what its maximum ISO speed should be when it's in automatic mode - ISO 400 is the minimum value.

Shots at ISO 400 will have noticeable loss of quality around edges and discoloured (purple) pixels in dark areas. This doesn't bode well for indoor shooting, so you'll be challenged when taking photos in a museum, for example.

When shooting in bright sunlight, with a low ISO and a mid-range aperture, the Panasonic LUMIX DMC-TZ8 can take photos at a decent quality, and its ‘Intelligent multiple metering' mode is good enough to properly expose contrasting colours in bright light. But the problem is that its images are not an improvement over the Panasonic LUMIX DMC-TZ7, so if you've currently got a TZ7 you shouldn't feel as though you're well behind in the technology stakes. In fact, in our opinion, you have the better camera.

Along with the noticeable noise and colour problems above ISO 200, images are soft when using the smallest aperture value - which, at f/6.3, isn't as small as we would like. At this aperture setting, the picture quality will suffer from a slight degradation in detail and images will look a little blurred. It's something we noticed when shooting in both aperture priority and landscape modes (Panasonic calls it Scenery mode) on a sunny day. The landscape photos looked much sharper than the ones taken in aperture priority mode. The camera selected a larger aperture of f/5.3 when it was in landscape mode, and this resulted in much sharper images.