Versa offers other small-car virtues, including nimble handling, easy parking, and lively performance.And it delivers an EPA-estimated 31 mpg on the highway with an automatic, 33 mpg with a manual transmission.

The Versa competes with the lower priced Toyota Yaris and the more expensive Honda Fit, but it is slightly bigger than either.All three are subcompacts designed with tall rooflines for increased interior comfort and visibility.The Versa is the smallest car you'll find in Nissan showrooms: smaller and less expensive than the compact Nissan Sentra, but offering greater interior space and more versatility.

The Versa has received the highest possible ratings in government and insurance industry crash tests, though keep in mind that's among small cars (five stars from the National Highway Traffic Safety Administration; and a 'good' rating from the Insurance Institute for Highway Safety).Versa safety features include dual-stage frontal air bags, front-seat side-impact air bags for chest protection, and roof-mounted curtain air bags for head protection.

Versa went on sale as a five-door hatchback in July 2006, with a four-door sedan following in January 2007.Combined, the sedan and hatch sold more 59,000 units in less than one model year.For 2008, a Sport Package is available for both the sedan and hatchback, consisting of front and rear spoilers, lower body side sill extensions, and fog lights.

Bottom line, the Nissan Versa is a big small car with comfort, performance and versatility.It's roomy and offers good fuel economy.

The Versa S sedan ($12,880) and hatchback ($12,980) come standard with cloth upholstery; air conditioning with micro filter; four-speaker, 120-watt AM/FM/CD stereo; tilt steering column; and 185/65R15 tires on 15-inch steel wheels.The hatchback also features a 60/40 split folding rear seat.A six-speed manual transmission is standard, a four-speed automatic transmission is optional ($800).Options include cruise control ($200), and a Power Package ($700) consisting of power windows, power door locks, remote keyless entry, door armrest pads, rear door map pockets, and a glove compartment light.

The Versa SL sedan ($14,890) and hatchback ($14,980) make cruise control and the contents of the Power Package standard, plus a more powerful (180-watt) stereo with an in-dash 6CD changer and MP3 capability, premium woven seat fabric, a more adjustable driver's seat, and center armrests front and rear.Tires are the same size as the base model's, but are mounted on 15-inch machined alloy wheels.Sedan and hatchback both come with split folding rear seats.A six-speed manual is standard.Optional is a continuously variable automatic transmission, or CVT ($1,000); a four-speed automatic transmission is an option ($750) for the SL sedan.

Options for the SL include XM Satellite Radio ($150), along with five option packages: The Convenience Package ($650) features an Intelligent Key system, Bluetooth hands-free phone connectivity, and audio switches on a leather-wrapped steering wheel.The Sunroof Package ($600) features a power sunroof and illuminated visor vanity mirrors.The Sport Package ($700) includes fog lights, a rear spoiler, side sill extensions, unique front and rear fascias for the hatchback, and a front chin spoiler for the sedan.An Audio Package ($300) for the hatchback adds a 100-watt Rockford-Fosgate stereo with premium speakers and subwoofer.

Accessories for Versa include an iPod interface ($290), splash guards ($110), floor mats ($105-$155), auto-dimming mirror ($125), interior accent lighting ($300), and aluminum kick plates ($130).A rear roof spoiler ($250) can be added to any hatchback.

Safety features are comprehensive, and include advanced front airbags, side-impact airbags, roof-mounted curtain airbags, front-seat active head restraints, and a tire pressure monitoring system.Anti-lock brakes (ABS) with Brake Assist and Electronic Brake-force Distribution (EBD) are an option ($250) on all models and we recommend getting it.

Coming at you, the Versa is clearly related to the retro-future-cool Quest minivan, with a smaller rendition of the same flying-V grille that seems to cantilever off a strong center post, emphasized at either end by classy, triangular headlights.Similarly, a tall, steep windshield aids space efficiency in the van and in the Versa as well.

It's very different at the Versa's near-vertical rear, where the little Nissan almost looks like a hatchback BMW never built.The bottom edges of the tailgate angle sharply inward to clear the cat's-eye taillights.We're guessing it was designed this way to allow those trapezoid taillights to stay on the body rather than being mounted on the tailgate itself.It gives the rear end a unique character, though the tailgate opening is smaller than it otherwise could be.

The sedan is nearly seven inches longer than the hatchback and has a more conventional rear end.The sedan is handsome enough, with its long, tapering sail panels.

We find the hatch more appealing.We like its distinctive styling and find it more versatile than the sedan.

The cloth-covered seats are comfortable without being too soft and offer plenty of side support.

The back seat is particularly impressive.As you get in you'll be pleasantly surprised by the size of the rear door and how the front edge of the rear wheel well does not intrude as you step in.There are many larger four-door sedans and even many large SUVs that have smaller rear door openings.Even a six-footer shouldn't feel cramped as the rear seat legroom is best in its class and, at 38 inches, is within half an inch of the Toyota Camry, an inch more than in the Ford Explorer, and only an inch and a half short of a Chevy Suburban.Indeed, the Versa's rear-seat legroom is more generous than in any other vehicle in Nissan's lineup, except for the humungous Armada SUV.The Versa sedan gives up about half an inch of rear-seat headroom to the hatch, but that's not all that much.

Nissan has made sure that most of the surfaces you touch, such as the armrests and door handles, have a soft feel to them.No hard plastics here.

The instrument pod contains three large, well-recessed gauges that are easy to read.The speedometer takes pride of place in the center and almost seems as if it is floating over the other two gauges.

Controls for the dash mounted radio and CD changer are well integrated into the center stack, and although they are not very large they are easy to see and comprehend.There is a large volume knob in the center with a very visible power button.Three functional, conventional knobs operate the climate control system.All in all there's nothing fancy about any of the controls, although everything looks well finished.Two large cupholders are conveniently located under the center stack.

The optional Intelligent Key allows for keyless starting of the engine, something that up until now has only been available in luxury cars.We don't recommend it.Tow truck operators tell us they get a lot of calls dealing with keyless starting systems.And we don't find them a big benefit.

Cargo versatility is a strong point for the Versa hatchback.There's a generous 17.8 cubic feet of cargo space with the rear seats in place.Fold them down and you've got 50.4 cubic feet, which is almost as much space as you'll find in a small SUV.Part of the reason for the spacious rear cargo bay is the careful design of the rear suspension so that no strut towers intrude into the interior.The versatility of the three-door hatchback is one of the unsung tales in the world of automobiles.

The Versa sedan offers a 13.8 cubic-foot trunk, which is good for the class.

That's not to say a CVT is not as good as a conventional transmission, but it is different.It delivers a much smoother drive as there are no gears to change or hydraulics to slip.Instead, a segmented belt rides up and down on cone-shaped pulleys to vary the speed ratio between the engine and the drivetrain.It works more efficiently than a traditional automatic, which is why the Versa equipped with a CVT delivers the best highway mileage.Around town it even has the same economy as a manual transmission.

At the Versa's introduction, Nissan said the regular four-speed automatic transmission would eventually be phased out in favor of the CVT; while the six-speed manual would remain available for those purists who enjoy shifting gears.

As Nissan believes the CVT Versa will be the most popular model in the range, that is the one we spent time driving.From the word go we were pleased with our experience in the car.It had plenty of zip and there was no problem merging into traffic on a fast free-flowing freeway.When you stomp on the gas pedal the sound of the engine revving instantly before the car accelerates can be a bit disconcerting to some.We found it not unpleasant, in fact it sounds kind of fun.Of course in regular stop-and-go traffic under slow acceleration there is no sensation other than the car moving forward smoothly with no sound or feel of shifting gears.It's certainly a far cry from the notchy gear shifting that used to be all too common on small four-cylinder cars with automatics.

On winding roads in Tennessee, near where Nissan is building its new U.S.headquarters, we found the car's handling to be perfectly adequate.It's not sporty like a Mini Cooper, nor is it sloppy like budget cars of a few years ago.Sporty drivers might wish for more feedback from the steering and more power, but there's no reason for others to complain.

The Versa is one of the first cars in this price category to feature electric power steering.In the past we have been disappointed in the poor feel of electric steering, but Nissan seems to have designed this system so it feels just as good as any hydraulically powered steering.No complaints here.

Thanks to the long wheelbase with wheels pushed out toward the four corners, the ride is better than one usually expects from a small car.Brakes are fine but again don't expect to race this car through a slalom.It wouldn't take much, though, for Nissan to upgrade components and produce a truly sporty version, as the fundamentals for a decent performance car are all there.

New Car Test Drive contributor John Rettie filed this report from Nashville, Tennessee.John F.Katz added some commentary.