Too often Mitsubishis end up on the fringe of major vehicle segments. Whether it's due to oddball styling, modest engine output and/or unimpressive cabin decor, they're relegated to alternative status when pitted against the mainstream players. And so it was with the first-generation Mitsubishi Outlander, which struggled to find a niche even as the small-SUV segment expanded. But the redesigned 2007 Outlander is destined for the popular crowd in this class. It's larger and more athletic in personality than its predecessor, and Mitsubishi has dressed it in a sharp new wardrobe. It's also equipped with an all-new V6 as well as a coveted third-row seat. In short, the 2007 Mitsubishi Outlander offers just about everything most buyers are looking for in a compact SUV.

The Outlander's transformation began with a new platform. It's a version of the next-generation Lancer platform that underpins the Dodge Caliber and Jeep Compass. But development work wasn't complete at the time of Mitsubishi's big breakup with DaimlerChrysler, so the two sides finished up on their own: The basic design is the same; the specific components and tuning are different. The '07 Outlander is only 4 inches longer than the old one, but this gave Mitsubishi enough room to install a kid-size, third-row bench that drops into the floor without encroaching on second-row legroom or shrinking the cargo bay to Little Tikes dimensions. In fact, cargo capacity has increased substantially to nearly 73 cubic feet. An unusual clamshell-style hatch incorporated into the rear bumper provides easy access to strollers and groceries, along with convenient tailgate seating during afternoons at the soccer fields.

Overall, the 2007 Mitsubishi Outlander stacks up well in the compact-SUV segment. With 220 horsepower, it keeps up with most V6-equipped competitors, save for the unusually quick Toyota RAV4, and the Mitsubishi's sharp handling dynamics make it one of the more entertaining utility vehicles in this price range. Negatives include the third-row seat's counterintuitive folding procedure and the fact that many of the most desirable options, including xenon headlights, leather upholstery and an MP3 player jack, are only available as part of expensive packages. In addition to the RAV4, consumers looking at the Mitsubishi Outlander will also want to consider the Ford Escape, Honda CR-V, Hyundai Santa Fe, Mazda CX-7, Subaru Forester and Suzuki XL-7. While each of these vehicles has certain advantages in this class, the attractive Outlander offers a balanced package and would no doubt be a satisfying compact SUV to own.

A small SUV, the 2007 Mitsubishi Outlander comes in ES, LS and XLS trim levels. Available only in front-wheel-drive configuration, entry-level ES models are equipped with 16-inch steel wheels, air-conditioning, a six-speaker CD stereo, cruise control, a trip computer, full power accessories and reclining rear seats. The LS adds alloy wheels, a roof rack, privacy glass, a leather-wrapped steering wheel with audio controls, two additional 12-volt power points and a cargo cover. The LS also has a longer options list. Opting for the top-of-the-line Outlander XLS provides 18-inch alloy wheels, a third-row seat (increasing seating capacity to seven), a keyless ignition system, automatic climate control and Bluetooth capability.

Most options for the Mitsubishi Outlander are available only in packages. The most interesting of these is the Navigation Package, which includes a nav system that runs off a 30GB hard drive; one-third of the hard drive space is available for owners to store and play MP3 files. There's also the Sun and Sound Package, which combines a nine-speaker, 650-watt Rockford Fosgate stereo (with an MP3 player jack) with a sunroof, and the Entertainment Package, which sets you up with a rear-seat DVD player. Outlander XLS buyers who opt for Sun and Sound are also eligible for the Luxury Package, which provides xenon headlights, leather upholstery, front seat heaters and a power driver seat. Towing preparation is also available.

Every 2007 Mitsubishi Outlander comes with a 3.0-liter V6 rated for 220 horsepower and 204 pound-feet of torque. (Outlanders sold in California-emissions states make only 213 hp.) A six-speed automatic transmission with a manual mode is standard; Outlander XLS models also have magnesium paddle shifters mounted on the steering column.

Outlander LS and XLS buyers have a choice of front-wheel drive or all-wheel drive, while the ES is front-drive only. The AWD system offers an unusual amount of flexibility for this class. Twist the red console dial to "2WD" and power goes only to the front wheels to save fuel. Choose "4WD Auto" and at least 15 percent of engine torque is routed to the rear axle at all times, and when you're accelerating on packed snow or other slippery surfaces, the rear wheels can accept up to 60 percent of the power. Choose "4WD Lock" and you've locked the front and rear axles together in a 50/50 split for maximum traction.

Fuel economy rates 20 mpg city, 27 mpg highway on front-drive Outlanders and 19/26 on AWD models. Properly equipped, Mitsubishi's compact SUV can tow up to 3,500 pounds.

All major safety features are standard on the Mitsubishi Outlander, including antilock disc brakes, stability control, a tire-pressure monitor, front-seat side airbags and full-length side curtain airbags. (On the seven-passenger XLS, the airbags extend further back to cover the third row.) Whiplash-reducing front head restraints are also standard. Rear backup sensors are unfortunately not available, and we think Mitsubishi would be wise to add this valuable safety item to the options list. In IIHS frontal-offset crash testing, the new Outlander earned the top rating of "Good."

Driving the 2007 Mitsubishi Outlander is more fun than you might expect, as its well-tuned chassis gives it sporty reflexes around corners and transmits considerable feedback to the driver. The steering is nicely weighted, and the brakes feel strong and progressive. Ride quality is just as important as handling in a compact SUV, though, and the Outlander is indeed comfortable and well-mannered when cruising. The 3.0-liter V6 is a little shy on low-end torque, but once revved up it moves the Outlander along smartly and has smooth power delivery. Shifts from the six-speed automatic are crisp and well-timed.

Inside, everything comes together in comfortingly normal fashion: Sight lines are good, controls are simple and seats are comfortable. One disappointment is the lack of a telescoping steering wheel. The 60/40-split second-row bench offers three notches of seatback recline and four notches of fore/aft adjustment. The third row in Outlander XLS models is strictly for children (and small ones at that), and although it folds flat into the floor, a confusing muddle of pull-straps makes the procedure more complicated than necessary.

In terms of cargo room, there are a mere 15 cubic feet with the third-row seat in use, but fold that down and you've got 36 cubes (or 39 in five-passenger models). Fold and flip the second-row seats and there are just under 73 cubic feet at your disposal. We particularly like the Outlander's clamshell rear hatch, as the upper portion provides convenient access to groceries, while the lower portion (built into the rear bumper) drops down to form a tailgate.