From the front the FX7 has a far less oblong appearance than the FX5, it seems better proportioned and is quite a bit smaller than that camera (112 cm³ vs. 172 cm³). The body is made from metal with a fashionable (if less than practical) chrome band wrapping the rounded sides and camera top. At the front is what sets this camera apart from other ultra compact digital cameras, a 3x zoom image stabilized lens system. It's a lens compact enough to retract back completely into the camera body and yet features a stabilized lens element, pretty remarkable. On the downside it's not very fast, F2.8 at wide angle but F5.0 at telephoto, although obvious having OIS can compensate somewhat.

The rear of the camera is dominated by a huge 2.5-inch LCD monitor, which takes up around two thirds of the surface area. It's nice to see that despite its tiny dimensions the designers have managed to retain plenty of external controls (which follow the now well established Panasonic layout), though they are inevitably a touch on the small side.

Side by side

As you can see the FX7 is noticeably smaller than the FX5 and also looks surprisingly small next to Konica Minolta's DiMAGE X31 (not competition simply here for a size comparison).

In your hand

Despite its diminutive proportions the FX7 does actually work quite well in your hand, with the slightly recessed thumb grip on the rear ensuring a fairly steady hold. We found it fairly easy to shoot single handed and still get good results. The combination of metals used give the camera a 'quality' feel, and it really is truly pocketable. It's light (153g), but well balanced. The only handling problem we found was that it's a little to easy to accidentally press the controls (changing the flash mode, for example) with your thumb when using the camera - an inevitable consequence of such a tiny body. The design and size of the body and positioning of the shutter release also makes camera shake more of an issue than it would be in a larger camera, so it's a good job Panasonic included image stabilization!

Body elements

The combined battery and SD storage compartment is found in the base of the camera on the right side under a slightly flimsy hinged cover (one of the only bits of plastic on the body). The battery held in place by a secondary spring clip.
The battery is a 3.7 V 710 mAh Lithium-Ion unit and is charged by the dedicated charger. We found battery life to be on the low side to say the least; the 120 shots maximum (CIPA standard) is optimistic and depends on incredible self-control when it comes to using the playback (and this camera's big screen means people just keep asking to look at it!). The lack of an optical viewfinder means you really do need to budget for a second battery.
On the right side of the camera (from the rear) is a rubber compartment cover which has a chrome plastic 'cap' on it so that when closed it blends neatly into the rest of the camera styling. Behind it is the combined AV/USB connector and DC-IN connector.
The 114,000 pixel, 2.5-inch LCD screen is bright and clear, and has a high enough refresh rate to appear virtually lag-free. It works well in practically every situation - though (as with all screens) it can be a little difficult to see in very bright direct sunlight. As is often the case for large monitors the display pixel count isn't high enough to do the screen justice and the image can often appear pixelated (it's just what happens when you stretch 114,000 pixels over a 2.5-inch screen)
The 35-105mm equiv. lens retracts almost completely flush into the body and extends by around 18mm when powered up. That Panasonic has managed to squeeze an optical stabilization system into such a tiny lens on a tiny camera is a tribute to the skills of the designers involved. Of course, this being a Lumix camera, the lens proudly sports the Leica name (it's a 7-element Elmarit with 3 aspherical elements for those who are interested in that kind of thing).
Despite filling over two-thirds of the rear of the camera with that huge 2.5-inch screen Panasonic's designers resisted the temptation to move the majority of the FX7's controls into menus. The small, but perfectly usable, buttons give direct access to most of the everyday shooting controls (flash, AE compensation, macro, self-timer and so on).
The top plate also has its fair share of controls. The shutter release sits inside the zoom rocker, both of which have a nice positive action. In a first for Panasonic the O.I.S gets its own dedicated button. To the left of the shutter release is the power switch. Recessed into the rear of the camera is the main mode dial, which has positions for record, simple mode, play, macro, scene mode and movie mode.
The small flash is more powerful than you'd expect, but still only reaches about 13 feet at the wide end of the zoom (auto ISO). It's a little too close to the lens for our liking, meaning red-eye is a fairly common unless you use the anti-red eye setting. The pre-flash delays things by just under a second, meaning there's a risk your subject will move before the picture is taken.