The war is starting to heat up in the brave new world of ILCs (interchangeable lens cameras). Olympus started it in the fall of 2009 with their PEN camera that looked like their retro range-finder of old but boasted their micro 4/3 sensor that was a sibling to the sensor used DSLRs. Panasonic and Samsung have jumped in, and Sony is the first of the big 3 (comprised of Canon, Nikon and Sony) to enter the market. The NEX-5 is a 14.2 megapixel camera that's available with 2 kits lenses (an 18-200mm long zoom is sold separately).
These cameras marry the large DSLR size sensor with the compact design of a range finder camera. They technically aren't SLR cameras since they use direct view rather than an internal mirror and tradition pentaprism design. That means you'll use the LCD to frame your shots since there's generally no piece of glass to look through (though an optional digital viewfinder is available that does generally the same thing).
Sony, being Sony, had to to make the smallest ILC camera body yet. Their new e-mount lenses aren't the smallest since the Sony uses a full APS-C (DSLR size sensor). The larger the sensor, the larger the lens. That's actually a very good thing because a larger sensor means higher quality images. Sony is among the first to move away from micro 4/3 and we've found the NEX-5 to have the best image quality. In fact, it can take some really stunning photos that rival those of an APS-C sensor based DSLR.
The camera can also shoot full 1080p video in AVCHD format (MPEG4 lower resolution too). The $100 cheaper NEX-3 can't shoot 1080p and it has a plastic rather than metal body. Otherwise it's the same. Video quality in AVCHD is also excellent and the camera continuously focuses for sharp video (DSLRs can't do that). Both kit lenses are quiet when focusing so they don't intrude into recorded audio tracks.
The NEX-5 sells for $649 to $699 depending on which kit lens you go with: the 16mm f2.8 pancake or the 18-55mm f3.5-5.6 zoom. It's available in silver or black though the metal clad lenses are only available in silver.
Who's the NEX-5 for? Someone who's looking for DSLR quality in a much lighter and more compact form. It's also ideal for those who are moving up from a point and shoot because it features an LCD-driven control system rather than a lot of dials and buttons. Serious shooters will likely miss the hardware controls, but I've been shooting serious with SLRs for decades and have adapted easily to the NEX-5.
Our full written review will follow with much more detail. In the meantime, here's our 10 minute video review of the Sony NEX-5 camera:
-------------------- Lisa Gade Editor in Chief, MobileTechReview
Video review: Sony NEX-5 tiny interchangeable lens camera