OK, we get it. There are some things we just can’t have. You can’t

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have a little cellphone with a big screen. You can’t have a big car that gets amazing gas mileage. And you can’t have a little camera that takes pro-quality photos.

No, wait — there’s some hope on that last point.

Most people — about 92 per cent of us — buy little pocket cameras that take so-so photos. Only about 8 per cent buy those big, black, heavy S.L.R. (single-lens reflex) cameras that take magazine-worthy photos.

It’s not that people don’t want better pictures. It’s just that they’re not willing to hang an anvil around their necks to get them. Next month, however, Panasonic will offer the first camera in a new format called Micro Four Thirds. Its mission: to put the photographic quality of an S.L.R. into a compact body. If it works, then these cameras will surely earn adjectives like “revolutionary,” “important” and “popular.”

Panasonic’s DMC-G1 camera ($800 list price) is indeed small compared to popular S.L.R.’s like the Canon Rebel or the Nikon D90. Both the body and the lens are smaller in every dimension. As a result, the new G1 occupies 29 cubic inches, in contrast to 64 cubic inches on that Nikon; it weighs 13.5 ounces, versus 22. It is, in fact, the world’s smallest interchangeable-lens camera.

Why not just say it’s the world’s smallest S.L.R.? Because technically, it’s not an S.L.R. Panasonic achieved the space savings by performing a radical boxectomy. That is, it removed the box containing the mirror and prism that traditionally bend the lens’s light up to your eye (the “reflex” system that gives an S.L.R. its name). Without that contraption, the camera loses nearly an inch of depth. The lens can now be placed much closer to the light sensor, and therefore the lens itself is much smaller.

And yet the sensor itself — a crucial factor in picture quality — remains full size. At 0.9 inches diagonally, this 12-megapixel sensor is not quite as big as the Nikon’s (1.1 inches), but it’s still S.L.R.-worthy — and much bigger than a typical compact camera’s sensor (usually about 0.4 inches).

So if this is such a simple idea, how come nobody else has tried it? Two reasons. First, it means junking the basic S.L.R. design that’s been in force for 50 years. It means that generations of full-size lenses won’t fit without an adapter.

Second, if the mirror and prism are gone, how are you supposed to compose your shot?

On the Panasonic, when you put your eye up to the viewfinder, you are not, in fact, seeing out the lens. You’re looking at a tiny screen.

Photographers generally hate these electronic viewfinders. They look coarse and jerky. But Panasonic, recognising the importance of this issue, adapted a higher-res technology from its commercial TV equipment. The result: a tiny screen with 1.4 million pixels, compared with the paltry 200,000 on most electronic viewfinders.

As a result, looking through the viewfinder comes breathtakingly close to peering through glass. Not quite as clear or realistic, but fine for most people.

Besides, you don’t have to look through the eyepiece. You can also use the huge back-panel screen to frame your shots. It, too, has much higher resolution than most cameras; it also updates itself 60 times a second, twice as often as is typical, so your preview is amazingly smooth.

This screen also flips out and swivels, so you can take pictures over your head or down at your knees without climbing or bending. You can even frame your own self-portraits, which is impossible on most S.L.R.’s.

Without the mirror, Panasonic also had to ditch the autofocus system that most S.L.R.’s use. The replacement system, called contrast detection, is not new — all S.L.R.’s that have a “live view” feature (where you can frame the shot using the screen) use this system. Most of them, however, do it horribly slowly; it can take as long as three seconds to focus. But the G1 can focus in about a third of a second, about the same speed as other non-live-view S.L.R.’s in this price range.

All right, so now you know the G1’s secrets. How well does it all work?

There’s an autofocus assist light that works wonders in dark rooms, a three-frames-a-second burst mode, a face-recognition mode that exposes up to 15 faces in a scene and an HDMI jack for displaying pictures on a hi-def TV. Most of this is easily accessible and well designed; the one exception is the Shutter Mode lever (single shot, burst mode, self-timer), which, in the dark, feels and works exactly like the On/Off lever right beside it.

The pictures look wonderful and all of the effects that would be impossible with a typical small camera — trailing car lights, frozen splashes, eight-second star-trail exposures — are easy to dial up with this one.

So it’s true: Panasonic has shattered longstanding technical hurdles, turned conventional wisdom on its head and invented the elusive hybrid.Let’s welcome the Panasonic G1 — both for what it is, the world’s smallest interchangeable-lens camera, and for the new era that it introduces. If you’re a photography fan who’s spent years being frustrated by one compromise or another, your life is about to get considerably more interesting.