Sanyo returns this year with an update to the VPC-HD1. The aptly named Sanyo Xacti VPC-HD2 features a 7 megapixel CCD sensor, although the sensor size remains the same at 1/2.5″. Other important features include a higher sensitivity in low-light situations and support for SDHC cards. Also of importance is the addition of HDMI output on the Xacti VPC-HD2’s docking station. As the world’s smallest HD camcorder we will have to see how the VPC-HD2 stacks up to the competition, especially when its predecessor did not fare so well.