I bought this camcorder for trips to the beach and vacations to be able to take in the water. I have yet to use it under water, but I have taken it to the beach and out in the waves. It is nice to be able to do that with no worries about ruining the camera.
It takes great quality video outside and in good light. The additional option of 8MP pictures is a nice plus as well. My only two gripes would be video quality in low light and ergonomics. It is definitely meant to be used outside. I can say that it did take good video even in overcast conditions, but not inside my house. I also found that the controls were a bit small and that the camera itself is not particularly comfortable to hold if you have larger hands. It feels alright with the screen down, but you can't see what you are shooting that way. Once you flip the screen out, your fingers have very little to grip. I had to use two hands to keep the camera steady and operate the buttons. Sanyo needs to consider giving the front of the camcorder some notches for fingers (preferably some kind of rubber for added grip).
If you want a nice, inexpensive camcorder that can also take great pictures for use outside in & around water, you can't beat this one. If you are looking for a camcorder that is good for recording indoors or in low light, you would want to go with something else. If you want one that can go deeper than 5 feet and aren't concerned as much with taking pictures, consider the VPC WH1 which shoots up to 10 feet under water at 720p HD.
I will update my review after my vacation as to the underwater capabilities.Get more detail about Sanyo Xacti VPC-E2 Digital Camcorder and 8 MP Digital Camera (Blue).
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