The 8-megapixel Lumix DMC-LS85 from Panasonic has a surprisingly rich feature set and good image quality for a $120 point-and-shoot camera. Its Leica lens offers a 4X optical zoom, from 33mm to 132mm.

Like its older (and more expensive) sibling, the Lumix DMC-FS25 (), the DMC-LS85 has a convenient Intelligent Auto (iA) button on its top, next to the shutter button. Pressing the iA button turns on various in-camera optimization features, such as optical image stabilization, automatic scene selection based on the shooting environment, red-eye correction, and ISO adjustment. It’s a handy thing to have right next to the shutter button, and it did a good job of tweaking the settings based on what I was shooting. Casual set-it-and-forget-it photographers will definitely like the iA button.

Panasonic Lumix DMC-LS85

You can also select your scene mode manually, and there are 21 settings to choose from in the LS85’s menu. Old standards such as Portrait, Landscape, Sports, and Candlelight are in the mix, but there are also some unique modes, such as Aerial Photo (for taking pictures through airplane windows), Fireworks, Food, and a High Speed Burst mode that reaches up to 5 shots per second at the lowest-resolution setting.

It’s also great to have optical image stabilization in a camera of this price. Other bargain models in the $150 range have either digital image stabilization or no image stabilization at all. The stabilization works well, too, as I captured sharp images even when I shook the camera around.

The DMC-LS85 has a 2.5-inch LCD.

Other convenient features include the ability to run on two AA batteries and an SD/SDHC card slot that is on the side of the camera, rather than hidden in the battery compartment. As for battery life, the Lumix DMC-LS85 fared well in our lab tests, firing off 280 shots before the batteries needed to be replaced. That’s short of the 300-plus shots we’ve seen in a lot of other point-and-shoots, but good enough to net a battery life score of Good.

On the downside, the Lumix DMC-LS85 has a plasticky, cheap-feeling build that’s also a bit bulky in the hand thanks to the AA batteries. The 2.5-inch LCD screen on the back is also a bit small, but it’s plenty bright enough to see in sunlight.

Like the Lumix DMC-FS25, switches and buttons handle most of the controls of the DMC-LS85. The shutter button, zoom ring, Intelligent Auto button, and on/off switch are all on top of the camera. To the right of the LCD on the back are a photo/playback switch, a dedicated mode button, and a menu button surrounded by four navigation buttons that double as one-touch controls for exposure settings, the flash, the macro mode, and the timer. Under that are two more buttons to adjust display settings and access a separate menu for image stabilization, auto focus, white balance, and LCD brightness.

In our lab jury evaluations, the Lumix DMC-LS85 earned an overall image quality rating of Good. Color accuracy and low levels of distortion were its strong suits, but its images weren’t as sharp as those from much of the competition.

The Lumix DMC-LS85 also shoots motion-JPG standard-definition video at 30 frames per second, but like most point-and-shoot cameras, you can’t zoom in or out while you’re shooting video.

The camera is available in black, pink, or silver.

Macworld’s buying advice

The all-business Lumix DMC-LS85 certainly won’t induce awe-inspired gasps with its plain looks but it does offer nice features. If you’re on a budget, this camera is one to consider.

[Tim Moynihan is a senior editor for PC World.]