Perhaps because of its simplicity the FE-250 handles and performs extremely well. The position of the mode dial means that it doubles as a thumb grip, and despite its slim profile the camera is very secure and comfortable to hold. The zoom control is a rotary bezel around the shutter button, and although the zoom action is stepped, it has at least nine increments between wide and telephoto. One thing I wasn't so keen on though was the minimal pause at the end of the zoom range before moving into picture-ruining digital zoom territory. Another minor concern is the position of the flash, which is positioned to the right of the lens. Maybe it's just my notoriously huge hands, but I found that I had to take care not to get my fingers in front of the flash.
In terms of physical performance the FE-250 mostly does very well. It starts up in a little over two seconds, which is better than average. The AF system may be the same as the FE-230, but for some reason it seems to operate slightly more quickly. In good light it will focus in under a second, and copes quite well with low light. Despite its lack of an AF assist lamp I found it would focus reliably in a darkened room, although it was a little slower than in good light. In single-shot mode the shot-to-shot cycle time is a bit slow at around four seconds. It does have a high-speed continuous shooting mode as well, capable of firing at approximately five frames a second, but only in 3-megapixel mode.
The biggest difference between this camera and the FE-230 is in picture quality, and the improvement is astonishing. Since the difference in sensor size could account for the apparent difference in focal length and f-number, I've been trying to determine if the lens is actually the same one as the FE-230. It certainly looks very similar, so I can only conclude that it is much better suited to the 1/1.8-inch sensor, because the dreadful pincushion distortion at the telephoto end is completely absent, and even the wide-angle barrel distortion is greatly reduced. That amazing 10000 ISO setting is a bit of a gimmick, and unsurprisingly pictures shot at that setting look terrible, but the fact it can take a picture at that sensitivity at all is impressive. At the other end of the ISO scale the image quality is very good indeed, and in fact noise doesn't really become a problem until 1600 ISO, when the noise reduction system goes into overdrive and scrubs out a lot of fine detail. In all other respects the image quality was as good as any 8MP camera I've seen, and significantly better than most.
With the FE-250, Olympus has redeemed many of the black marks gathered by previous models in the series. For a very reasonable price it offers excellent build quality, decent performance and excellent picture quality, while maintaining the simplicity and ease-of-use for which it was designed.