When Nissan gave a sneak peak at its subcompact Versa a year ago, one comment was "they're going to sell a ton of these." With a base model price at $12,500, best fuel economy around 27/33, and a growing customer base, that assessment sounds about right to us.

Versa is the smallest Nissan sold in the U.S. where budget vehicle variety has expanded in reaction to escalating fuel prices. In both sedan and hatchback mode, the Versa also was designed to attract sometimes-fickle American consumers. (Downsizing because of fuel economy needs can tend to make one appreciate the virtues of the formerly maligned hatchback.)

Despite its diminutive size, the Versa has some edgy styling elements, such as taillamps that arrow into the body line and an elevated roof line that hides a surprising amount of interior space. Sport trim that spiffed up the upgraded SL hatchback last year is available on SL sedans for 2008. Standard sportier 15-inch tires, plus the addition of fog lamps, a deck-lid rear spoiler and chin spoiler, plus side sill extensions has got to take it from average to trendy for the younger buyer shopping with a wish list but at the limits of a tight budget.

Versa has impressive power for its size, with a 1.8-liter inline four that generates 122-horsepower and 127 lb-ft of torque. A six-speed manual is standard, and eclipses the five-speed ones on most competitive entry level vehicles, "S" models can opt for a four-speed automatic, while "SL" trims have an available Nissan Xtronic CVT (continuously variable transmission) that offers the Versa's best fuel economy rating.

Inside, the Versa is surprisingly roomy, and goes for more quality materials than some competitors. "Must have" options include Bluetooth hands-free cell phone communication, Intelligent key, XM Satellite radio, and enhanced audio with Clarion speakers and Rockford Fosgate-powered subwoofer.

Hatchback pricing starts at $12,650, $100 more than the sedan's base, but can increase considerably with options. (A power package and cruise control are standard on SL trims.)