The sub-$200 camera market is a tough one: There are plenty of options, but very few of them are stars. The 10.2-megapixel Kodak EasyShare M340 ($149.95 direct) is iffy at best. It has an extremely attractive price, a slim build, and a superb LCD, but without optical image stabilization, the camera's performance suffers.

At 2.3 by 3.76 by 0.75 inches (HWD) and 4.5 ounces, the M340 is one of the thinnest cameras I've seen. Despite its svelte package, however, the M340 feels a bit flimsy. My test unit had an attractive, glossy royal blue finish (it's also available in red, green, and silver), but the body is plastic. A brushed-aluminum finish, like the one on the 0.79-inch-thick Nikon Coolpix S230, feels sturdier and looks slicker. The controls are so-so: There's a dial on top of the camera that lets you choose modes, and the zoom toggle is on the back of the camera, rather than on the top, so it's a little tough to manipulate. The Menu and Playback buttons are thin, black plastic rectangles running along the right side of the screen, that when pushed, don't provide a satisfying response.

The LCD on the M340 is a definite bright spot. Packing 230,000 pixels, the 2.7-inch screen is sharp, large, and offers good contrast with minimal motion blur—a common problem with many cameras like the $180 Sony Cyber-shot DSC-W230 12.1 MP Digital Camera with 4x Optical Zoom and Super Steady Shot Image Stabilization (Black)  and even the $350 Panasonic Lumix DMC-FX48 12MP Digital Camera with 5x MEGA Optical Image Stabilized Zoom and 2.5 inch LCD (Black). As far as other budget cameras, the $199 (direct) Canon PowerShot A1100 IS can't compete: It has a smaller screen (2.5 inches) with half the number of pixels (115,000).

The menu system on the M340 is very easy to read and navigate, but it feels completely dated. Menu items are staid, white text overlaid on gray, and a red bar highlights your selections. If you like things simple, you won't mind, but similar shooters like the PowerShot A1100 make things more interesting by using shaded icons with more color and some animation.

The lens has 3x optical zoom lens with a focal length of 35–105mm, with corresponding maximum f-stops at f/3.1 and f/5.7. For the price, that's a decent lens, but the camera runs into shooting trouble elsewhere. First off, autofocus can be very slow; at times it took up to two full seconds to focus, but if your subject is already in focus, the camera can snap off quickly. The M340 performed well on Shooting-Digital.com's shutter lag test, averaging just 0.33 second from shutter press to image capture. In the best-case scenario, the camera can power up and fire a shot in 2.45 seconds. Even better, you only have to wait 1.74 seconds between shots. In comparison, the PowerShot A1100 starts up and shoots in only 2.26 seconds but takes 2.35 seconds between shots; the sluggish Coolpix S230 needs 5.79 seconds to start and 5.69 seconds between shots.

In the lab, the M340 did very well, outperforming more expensive shooters on some tests. To objectively gauge image quality, I use the Imatest hardware and software suite, which showed that the M340 produces extremely sharp pictures, with very little chromatic aberration, and average noise levels below ISO 800.

The M340 proved spectacular in the sharpness test. Any 10.2-megapixel camera should be able to capture at least 1,800 lines per picture height; the M340 caught a jaw-dropping 2,570 lines, which means more detailed images. As you move towards the outer edges of an image, the number of lines captured will inevitably decrease; subpar shooters tend to drop by more than 30 percent. (The Coolpix S230 decreased by 67 percent!) The M340, by comparison, averaged 2,169 lines at its outer edges, a decrease of only 15 percent. (Keep in mind, however, that our lab-based test shots are performed on a tripod and under optimal lighting conditions.) Noise levels were also good: The M340 produced acceptable amounts of noise up to and including ISO 400, but at 800 and 1600 graininess was readily apparent.

Under real-world shooting conditions, the M340 doesn't live up to its performance in the lab. I took outdoor test shots with the M340 and the Canon PowerShot A1100 IS, with both cameras in Auto mode. Every Canon shot came back sharp, but a handful of the Kodak's images were blurry, given the camera's lack of optical image stabilization (check out the slideshow for a side-by-side comparison shot). This is a major drawback unless you plan on taking all your shots on a tripod.

Video produced by the M340 is just okay. The camera shoots in standard definition (640-by-480) at 24 frames per second. Test videos I shot were watchable, but a bit jerky. Most newer cameras include a composite A/V cable for playback on your TV; this one does not.

The M340 is the first camera I've seen that can charge through its USB connection to a PC—something mobile devices have been doing for years. Unfortunately, the connection to the camera itself is proprietary (not micro USB–to–USB like the others), so you can't quickly replace a lost cable. The battery charging and data connection takes place over the same connection; the M340's included cable terminates in USB (to connect to PC) or a wall charger with a USB jack.

Despite its very affordable price, high-quality screen, and compact body, the Kodak EasyShare M340's flimsy build, and worse, its lack of optical image stabilization spoil the deal. Though most of the pictures I took with it came out looking better than those taken with more-expensive cameras like the Nikon Coolpix S230, you're better off spending a little more on a more consistent camera with image stabilization, like the Canon PowerShot A1100 IS. Even better, get last year's Editors' Choice-winning Canon Powershot A1000IS 10MP Digital Camera with 4x Optical Image Stabilized Zoom (Grey)  which isn't all that different from the A1100, and can be had for $150.