It seems that buttons are facing extinction, with almost every major camera manufacturer now offering at least one touchscreen model. Most seem to be aimed at gadget lovers more than photographers, though, with daft 14-megapixel sensors and gloomy small-aperture lenses.

The Sony TX7 is the first touchscreen camera we’ve seen that doesn’t seem compromised in other areas. Its gadget appeal is beyond repute. The 3.5in touchscreen fills the back of the camera and the 910,000-dot resolution is incredibly sharp. It’s no less handsome from the front with its sliding metal panel in place of a normal lens cover.

The screen is extremely sensitive to touches, and the interface capitalises on it with a touch-for-spot focus option and menu options arranged in grid formation across the entire screen for easy prodding. It’s also possible to customise which options appear to the left of the preview image in the space created by the screen’s wide aspect ratio.

There are some impressive features among the mode options. iSweep Panorama lets the user capture panoramic photos simply by rotating the camera. Handheld Twilight captures six frames in quick succession, aligns them digitally and merges them to reduce noise. Anti Motion Blur takes the same concept even further: for areas where the subject moved, only one frame is used, thereby giving a sophisticated hybrid of fast shutter and low ISO speed shooting.

The video mode is important enough to have its own button. Pressing it switches to record-ready mode, with its widescreen preview filling the screen. However, it also disables lens distortion correction. While photos are geometrically straight, wide-angle videos suffer heavy barrel distortion. It’s not a disaster, though, and otherwise, video quality is fantastic. With 1080i capture in AVCHD format, high quality stereo sound, smooth autofocus, sharp details and remarkably little noise, this is the best video mode we’ve seen from an ultra-compact camera. Dedicated AVCHD camcorders are more versatile with extensive shooting options and bigger zooms, but the TX7 competes with them for quality.

The results of our photo tests were less dramatic, with the lens failing to capture pixel-sharp images, but the automatic mode gave reliably solid results. The back-illuminated 10-megapixel sensor produced significantly less noise than 14-megapixel sensors at high ISO speeds, helping to offset the disadvantage of the dark f/3.5-4.6 aperture.

The biggest drawback – and this seems to be a common trait among back-illuminated sensors – was that the slowest ISO speed exhibited more noise than we’d hope for, disrupting subtle textures even when shooting in bright light. Even so, as a point-and-shoot camera the TX7 is unlikely to disappoint.

It’s disappointing that the TX7’s photos are no better than from cameras costing half as much. Ergonomics could be better too, as the enormous screen leaves little space to hold onto. However, the video mode alone is worth the asking price, and it’s great to get both quality photos and videos from such a compact package.