Sanyo's Xacti VPC-E2 is a handheld digital video camera, waterproof up to five feet. The E2 features an 8-megapixel image sensor for still capture, but its video performance is limited to 640 x 480 resolution. Video capture is interlaced, which should look fine when displayed on an SDTV, but makes smooth playback on computer monitors or modern HDTVs awkward. The E2 uses H.264 to compress its videos, able to store roughly one hour per gigabyte storage, and supports SDHC cards.

Sanyo packs in a 5-times optical zoom and digital image stabilization features. The software tracks faces and re-orients the frame in software to correct for vibration and tilt. A 2.5-inch LCD screen swivels 285 degrees, letting the user keep an eye on the recording even when holding the camera at an awkward angle. iTunes compatibility enables video-capable iPods to display the E2's recordings.