The FX550 has Panasonic's powerful dual-core Venus Engine V processor, so as you'd expect its overall performance is very good, although its start-up time of just over three seconds is a bit slow. In single shot mode at full resolution it has a shot-to-shot time of approximately two seconds which is nice and quick, while in long-period continuous shooting is can maintain a very impressive two frames a second and keep it up until the card is full.
The autofocus system is also very quick and accurate, focusing in a fraction of a second in good light. It does slow down a bit in dim lighting, but it has a good AF assist lamp and can focus in pitch darkness at a range of around three metres. The flash is very powerful with a useful range of around six metres and a recharge time of under seven seconds even after a full power flash.
I was slightly concerned to note that the FX550 is powered by a smaller battery than the FX500, rated at 940mAh rather than 1000, but this appears to have had no effect on the battery duration, which is still outstanding. I took around 200 test shots with the FX550 and the battery charge meter was still showing two out of three bars.
The FX550 has 20 percent greater resolution than the FX500, but this serves to demonstrate very clearly that simply increasing sensor resolution does not guarantee better image quality. Apart from the larger picture size there is no improvement here; the level of detail is roughly the same. Comparing the results from the two cameras side by side it's hard to spot any real difference in overall quality. The only slight improvement is in high ISO noise control. The FX550 is clearly better in this respect, producing usable images at 800 ISO with less detail lost to noise reduction than the previous model. It's an improvement, but not by much.
The Panasonic Lumix DMC-FX550 is and upgrade of the FX500, but only just. The extra two megapixels don't make much difference. However build quality, design and performance are all well up to scratch, and image quality is comfortably better than average. If you want an ultra-compact with manual controls it's probably your best option.