It used to be that the megapixel count was the main distinguishing feature between compact digital cameras. Today, most digital cameras feature well over 10 megapixels of image resolution, which is more than enough to create poster-sized prints. When working at this scale, every little imperfection in the camera becomes clear. A sub-par lens can cause slight distortions; inaccurate auto-focus can leave details blurry; and slow shutter speeds make capturing action impossible.

Manufacturers realized that at such high resolutions, they had to start incorporating features to increase image quality.

The best compact cameras market is no longer a race measure in megapixels; it has evolved into a technological battle, so we’ve decided to take a look at some of the most innovative cameras over the last year.

Sony Cybershot W370: Sweeping Panoramic Photos

The W370 is an amazingly feature rich compact digital camera, capable of shooting 720p HD video, 7x optical zoom, and state of the art image stabilization. It also sports Sony’s new sweeping panorama technology. Basically all you have to do is hold down the shutter button while spinning around in a circle, and the Cybershot W370 automatically stitches together an amazing panoramic shot. It also incorporates an impressive Intelligent Auto mode, which automatically optimizes your settings for nearly every possible situation.

Olympus E-P1: Pioneering a New Type of Digital Camera

There has always been a large gap in complexity between traditional point-and-shoot digital cameras and high-end DSLR’s. There has long been a need for a camera with a simple point-and-shoot interface for every day photos while still providing the options and image quality necessary for the photography enthusiast. Olympus created the E-P1 to bridge this gap. The Olympus E-P1 uses the same type of image sensor found in DSLR’s (larger and much higher quality than other point-and-shoots) as well as interchangeable lenses and external flash, all while providing a simple, feature rich interface of a point-and-shoot that people are familiar with.

Sony NEX-5: Perfecting a New Type of Digital Camera

Where Olympus created a new category in the digital market, Sony perfected it. Using the same concept behind the E-P1, Sony came up with its NEX-5, complete with interchangeable lenses and DSLR-class image sensor. This one makes a difference in the digital slr camera ratings. But Sony didn’t just copy Olympus; the Sony NEX-5 includes an onslaught of additional features. It’s capable of full 1080i video recording, HDMI output, sweeping panorama, smile detection, and even 7 frames per second continuous shooting. Sony took Olympus’ crossover concept and filled it out with just about every point-and-shoot feature you could think of.

Nikon CoolPix S8000: Tiny Camera, Huge Zoom

The Nikon CoolPix S8000 may seem like your basic, feature rich digital camera at first glance. It comes with most of the features you’d find in today’s fancy point-and-shoot camera, 720p HD video, HDMI output, image stabilization, etc. What’s absolutely amazing is the fact that the S8000 is a slim, compact camera with an unprecedented 10x optical zoom. Nikon may be onto something with this one. With megapixels hitting a brick wall of practicality, people will likely start looking at other quantifiable specifications, such as the optical zoom.

Nikon CoolPix S1000pj: Integrated Digital Projector

Speaking of small cameras with baffling features, Nikon also created the CoolPix S1000pj, the world’s first digital camera with integrated projector. While the camera itself is fairly average by today’s standards, the ability to create a slideshow on a 40-inch screen anywhere with a flat surface more than makes up for it. The concept may or may not catch on, but the Nikon CoolPix S1000pj proves that there is plenty of ingenuity in the digital camera market. It makes you wonder, “What will they come up with next?”