The Versa is a big and roomy inside with decent head room and leg room and lots of hip room, making it a good choice for larger drivers.Its big, cushy seats are comfortable.Back-seat passengers will find rear-seat leg room as good as that in larger cars and SUVs.The cabin is nicely finished and offers all the modern conveniences.

Yet the Versa offers the small-car virtues of nimble handling, easy parking, and lively yet efficient performance with excellent fuel economy.

The Versa is slightly bigger than the lower priced Toyota Yaris and the more expensive Honda Fit.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.

For 2010, Versa gets changes outside, inside, and functionally.All models have a new grille and wheels, and revised interior fabrics and finishes.The SL Hatchback model gets sport front and rear fascias, body side sills, fog lights, and rear spoiler as standard equipment.An optional navigation system is being offered.Other changes for 2010 include auxiliary input added to the base audio system; Interface System for iPod added to the upgraded radio.

Most models come with a 1.8-liter engine, though the stripper sedan model comes with a 1.6-liter engine.

Fuel economy for the Nissan Versa depends on the powertrain.Best is the Versa SL with CVT (Continuously Variable Transmission) with an EPA-estimated 28/34 mpg City/Highway.Versa S gets 26/31 mpg with six-speed manual, 24/32 with four-speed automatic.The base sedan with 1.6-liter engine gets 26/34 mpg with five-speed manual, 26/33 with automatic.

The base Versa ($10,990) is in the Sedan body style only and powered by a 1.6-liter engine of 107 horsepower.It comes with air conditioning (which can be deleted for a savings of $1,000), pre-wiring for audio.Anti-lock brakes are optional ($250).The five-speed manual is standard, but the base Versa is available with a four-speed automatic ($11,990).

All other Versa models come with a 1.8-liter four-cylinder engine of 122 horsepower.

Versa S Sedan ($13,100) with six-speed manual or four-speed automatic ($14,100) and Versa S Hatchback ($13,150) with manual or automatic ($14,150) come standard with cloth upholstery; air conditioning with micro filter; four-speaker, 90-watt AM/FM/CD stereo; tilt steering column; anti-lock brakes (ABS), and 185/65R15 tires on 15-inch steel wheels.The Hatchback features a 60/40 split folding rear seat.Options include a Power Plus Package ($930) with power windows, power door locks, remote keyless entry, cruise control, door armrest pads, rear-door map pockets, and automatic door locks; and Vehicle Dynamic Control with Traction Control ($370).

Versa SL Sedan ($16,100) and SL Hatchback ($16,530) are fitted with the Xtronic Continuously Variable Transmission (CVT).Versa SL models are upgraded with premium woven seat fabric, a more adjustable driver's seat, split folding rear seats, center armrests front and rear, the Power Plus Package, a 180-watt stereo with an in-dash six-CD changer and MP3 capability, and 15-inch machined alloy wheels.

A Convenience Package for the Versa SL Sedan ($650) includes an Intelligent Key system, Bluetooth hands-free phone connectivity, leather-wrapped steering wheel, and steering wheel-mounted audio controls.A Premium Package for the SL Hatchback ($980) includes everything from the Convenience Package plus 16-inch alloy wheels.A Moonroof Package ($600) for the SL Hatchback adds a power glass sunroof and illuminated visor vanity mirrors.Both SL models are also available with the Nav/SAT Radio ($610), which includes a navigation system with five-inch screen and XM Satellite Radio.

Accessories include splash guards ($110), floor mats ($155), auto-dimming inside mirror ($125), and aluminum kick plates ($130).A rear roof spoiler ($250) and a new cargo organizer ($160) can be added to the Hatchback.

Safety features include frontal 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 standard on the S and SL trim levels and an option ($250) on the base model.

Coming at you, the Versa has a broad, somewhat V-shaped grille flanked by triangular headlights.The SL Hatchback, with its front spoiler below the bumper, has a more aggressive and sporty look.

At the rear ends of the Sedan and Hatchback things are, expectedly, much different.With the Hatchback, the side edges of the tailgate angle sharply inward to clear the cat's-eye taillights.With the Sedan, the taillights are different but the trunk lid still angles inward.We like the Hatchback a little better, especially the SL version with its roof-mounted spoiler.

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

We find the Hatchback more appealing.We like its distinctive styling and it's more versatile than the Sedan.

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 at or near the top of the class.The Versa Sedan gives up about half an inch of rear-seat headroom to the Hatchback, 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 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 Sedan offers a 13.8 cubic-foot trunk, which is good for the class.

A CVT doesn't shift gears like an automatic transmission.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 such good highway mileage.Around town it has the same economy as a manual transmission, better than an automatic, in other words.

We've been pleased with the Versa.It has plenty of zip and there's 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, a phenomenon of the CVT, can be a bit disconcerting at first.We found it not unpleasant.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 clumsy gear shifting once common on small four-cylinder cars with three- and four-speed 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 the wheels pushed out toward the four corners, the ride is better than one usually expects from a small car.

The brakes are fine.If you decide on the base model we strongly recommend ordering the anti-lock brakes (ABS) with electronic brake-force distribution (EBD) and Brake Assist for their ability to help you possibly avoid an accident.

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