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Olympus has taken the performance and specs of one of our favorite ultrazooms, the SP-570 UZ, and put it all in a more compact, carry-able package: Olympus SP-565 UZ. Utilizing the same 10 megapixel sensor and 20x, 26-520mm equivalent zoom lens seen in the larger SP-570, the SP-565 measures only 4.6 by 3.3 by 3.2 inches and weighs in at 13.2 ounces.

According to Olympus, the SP-565 was developed in an attempt to make the performance of an ultrazoom camera more “portable and approachable.” The resulting device is not much larger than a conventional compact digicam, but packs in one of the most wide-ranging zoom lenses currently available on any camera regardless of size.

Although it retains the SP-570’s manual controls (including aperture and shutter priority modes), the SP-565 emphasizes a more point-and-shoot user experience, with 33 scene presets, face detection capable of tracking up to 16 faces in a single frame, Shadow Adjustment Technology that compensates for high-contrast and backlit scenes, and a Perfect Shot Preview function that allows shooters to preview the effects of settings changes and processing options before shooting.

The SP-565 is also the latest camera capable of capturing images before the shutter release is pressed. A new Pre-Capture system works in conjunction with the SP-565’s high-speed shooting mode, beginning to buffer reduced resolution frames in the 13.5 fps High-Speed Sequential Shooting mode as soon as focus is locked. The camera automatically preserves the last ten frames recorded before the shutter release is pressed, making it possible to capture action unfolding prior to actually snapping a picture.

A 2.5-inch LCD with 230,000-dot resolution and an electronic viewfinder work in tandem to provide visibility for shot composition in any light. Olympus’s Dual Image Stabilization, which includes a sensor-shifting mechanical stabilization system, is essentially a requirement for utilizing the SP-565’s full zoom range without a tripod.

Olympus has yet to completely abandon its proprietary xD-Picture Card memory type, but as with most recent releases from the company, the SP-565 includes an adapter for using the more common, mobile device friendly microSD memory format as well. Four AAs continue to provide power for Olympus’s latest ultrazoom, with an advertised 410-shot life promising some fairly serious power consumption improvements compared to previous models in this series.

From where we sit, the reworking of Olympus’s flagship ultrazoom into the smaller and lighter SP-565 UZ makes a lot of sense for a company that’s actively working to return to its heritage of building compact, high-function photographic equipment . Expect some solid head-to-head competition with Fujifilm’s recently reworked compact ultrazoom, the FinePix S2000HD, as well when both these cameras make it to market.

Expect a street price just under $400 when the SP-565 UZ hits stores in October.

We’ll have detailed specs for the Olympus SP-565 UZ posted in the next few hours.