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These digital cameras seems to have no differences in appearance. More of that, it seems that they do not have any differences in their internal arrangements. The lenses offers 4-x optical zoom (important point, not 3-x, new Sony's step for models of that class); the presence of all the latest Sony's photo technologies; the size, the weight, the 64mm (2.5-inch) LCD display - all are the same. And the matrix, very seemingly it appears to be in the point of fact, are the same too. Although the dsc w130 states it has 8.1 megapixels matrix, and the dsc w120 only of 7.2 megapixels. I think the dsc w120 is merely engineered in such a way that it doesn't uses the full of the matrix. Merely, of course, is not the word, that describes the situation with pin-point accuracy. So my violent assumption is that both the cameras have the same "hardware". Then disabling of some inessential functions of the onboard picture-editing tools are the facts of the same nature (although it would have been worthy to hold over a digital red-eye removing function). Other digital filters, such as fish-eye lens, unsharp masking, blurring go in handy for shots that are already transferred to a computer, on a big screen, when you clearly see what you are doing; and each up-to-date graphic editor can perform so. The difference in price between these models is ~ 30$ (200$ and 230$ respectively).
Now about available features and functions: the Carl Zeiss Vario-Tessar Focal honored lens (32-128mm / f/2.8-5.8), 4-x optical zoom; 15 MB built in memory on board for a few pictures, unless you purchase a memory card Memory Stick Duo or Memory Stick PRO Duo (or even more sophisticated: Memory Stick PRO Duo High Speed and Memory Stick PRO-HG Duo), proprietary technology Super SteadyShot Optical Image Stabilization - image stabilization system for shooting in poor light conditions-very valuable function; functions of faces and smiles recognition-allows you automatically to point focus on faces and to shot the moment this faces smile (and you can choose - whose faces, adults or children are to smile). This fantastic Smile Shutter mode is new Sony technology and, strange as it may appear, it works; Macro mode now turns on automatically-no longer be afraid to forget to switch camera in this mode when shooting close-up of small objects or, vice versa, return back; Sony Smart Zoom-intelligent zoom from Sony-a good working and useful thing; Burst Mode-shooting a large number of images in row - valuable photographer's resource too; optical viewfinder; compatibility with HDTV television; Photo Music feature which allows you to watch slide shows on the camera on TV with music soundtracks.
In Burst Mode Sony Cybershot dsc w120 captures 12 full-sized photos (7,2 megapixel) in 12 seconds. Sony Cybershot dsc w130 performs better and shots 15 full-sized photos (8,1 megapixel) in 7.5 seconds. Being based on our assumption that both the cameras have the same hardware, we can easily explain this fact-it takes time to recalculate the full snapshot into the trimmed one and to convert the size of the image.
The quality of images of both the cameras also are almost indistinguishable. Pleasant, natural colors, rather crisp and clear. Close inspection would, of course, reveal some artifacts, but it must be close enough. For example, it is possible to discover slight barrel distortion on wide-angle images of maximum dimension, and some softness, which better would be absent. It is more true as far as it goes for Sony Cybershot dsc w130-and it is understandable as its full-sized photos are larger. Contrariwise, these cameras are most "wide-angled" among other Sony compacts. And they are ones of the most compact among other Sony compacts-width, height and depth are: 88.2 mm-57.2 mm-22.9 mm.
Sony Cybershot dsc w125 and dsc w135 differ from the models just described only by complete set, specifically by availability of bag. Not in all contries these cameras are on the market.

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