An overworked expression is “the best of both worlds.” That is, I thought it was until I drove the 2008 Land Rover LR2. Now I can’t think of a more apt description.

A group of us auto journalists trekked to the Santa Barbara mountains, the site selected by the Land Rover folks to showcase their all-new premium compact SUV. It’s rather difficult to think of “compact” and LR2 in the same sentence – I’ve lived in smaller towns. There’s enough room to leave home, carry all your stuff and tow a trailer or a boat at the same time.

At first glance and from a distance, the LR2 bears a resemblance to Land Rover’s Freelander, the former entry-level model from the company that’s arguably the world’s leading sport-utility vehicle manufacturer. However, it’s dust in your eye, my friend ... LR2 is new from the ground up.

The technology that makes up an LR2 would tax the imagination of an automotive engineer with a PhD. It has an electronically controlled center coupling (linking the driveshaft to the rear differential) that transmits the necessary torque to achieve off-road traction demands. The LR2 proactively engages all-wheel-drive rapidly and completely. A new high-pressure pre-charge pump charges the hydraulic system as soon as the engine is started, allowing for all-wheel drive from the start.

Terrain Response is one of the core Land Rover technologies that gives the LR2 outstanding breadth of capability. There are four settings which the driver chooses via a rotary control: General Driving, Grass/Gravel/Snow for slippery conditions, on-road or off-road, Mud and Ruts and Sand. You won’t have to hire Bob Burns, Land Rover’s legendary director of training to ride with you … all the help you need is literally at your fingertips.

Terrain Response also controls Dynamic Stability Control, Electronic Traction Control and Anti-lock Brakes and Hill Descent Control (HDC). HDC is really slick. Once you learn to trust it to slowly bring you down the hill (which means you do not touch the brake or gas pedal), you’ll find excuses to try to use it. Working in tandem with HDC is Gradient Release Control, a system that ensures brake-line pressure is released progressively when the driver’s foot is removed the from the pedal on extremely steep hills.

Just because you can go over the river and through the woods to Grandmother’s house doesn’t mean you can’t drive 1,000 miles of freeway to Uncle Barney’s house. The LR2 is as comfortable an on-road vehicle as it is a capable off-road vehicle. There is no trucklike feeling or head toss related to bumpy roads or twisty, winding roads. I would be the first one to notice any signs of motion sickness caused by a curvy drive and the roads around Santa Barbara, but I did not detect any discomfort when driving or even riding in the passenger seat.

Powering the LR2 is a transverse-mounted 3.2-liter Denso EMS in-line six-cylinder engine producing 230 horsepower and 234 pound-feet of torque. It has a six-speed automatic gearbox with CommandShift that adapts to an individual driver style. With a curb weight of 4,255 pounds, the LR2 can still go from 0 to 60 mph in 8.4 seconds and has a maximum speed of 124 mph. Ground clearance under the front axle is 8.3 inches and 10.5 inches under the rear axle.

I'm used to reading specs from a manufacturer’s press kit when I’m writing reviews, but seldom do I see this statistic: “Wading depth.” In the case of LR2 it’s 19.7 inches. I can attest to the ability of this vehicle to laugh at water-filled, muddy trenches because one of the stations on the off-road trail we drove had a big pool of gooey water daring us to tackle it. “Ha, ha,” I said while switching to the Terrain Response to “mud and ruts,” and proceeded to keep going without so much as a minute pause.

The interior is in almost direct contrast to what one would think an off-road-capable vehicle would be. Gerry McGovern, design director, said: “The LR2’s cabin feels like that of a premium sedan – it’s comfortable, attractive, well-equipped and spacious.”

Normally I wouldn’t be all that quick to agree with a guy who walks around with a pencil in his hand and a head full of design images, but in this case, Gerry is right on the money. Everything from high-quality upholstery and tufted carpets to metallic and wood-effect finishes add premium touches. You can still go through deep mud puddles … but you’ll be doing it in style!

LR2’s elevated driving position (called “command view” by Land Rover) improves visibility and helps the driver feel in control. There’s lots of leg, shoulder and head-room in the front as well as the rear (called “stadium seating). The seats offer good under-thigh and back support and its strong side bolsters give excellent lateral support. In fact, the front-seat frames are similar to those of Range Rover Sport – big-car seats for a cabin that looks like it belongs in a big car. Six-way adjustment is standard on all driver seats.

Optional is two-stage seat heating. While the rear seat is wide enough to accommodate three standard adults (and includes a central armrest), it double-folds forward to offer a completely flat floor area. In its wisdom, Land Rover didn’t try to squeeze in another row of seats as is the current trend to appeal to buyers who obviously are disciples of Gulliver’s Travels. Total luggage volume is 58.9 cubic-feet with the rear seats folded forward and 26.7 cubic-feet when raised. The high load-space floor avoids the need to bend down to lower items in the cargo area.

Sitting in the command position also gives the driver an instantaneous view of the well-laid-out instrument panel with its metallic-bezeled circular analog gauges. The center stack is handsomely designed with metallic-ringed knobs for the HVAC controls. It will require time and practice to master all the knobs and buttons because there’s a lot of them. My advice is to take a long drive and by the time you come back you’ll be a professor. By the way, while you’re driving, you’ll be getting 16 mpg in the city and 23 mpg on the highway.

LR2’s standard audio system is no transistor radio. It includes an 8x40 watt power output and eight speakers plus a sub-woofer. Volume control is automatic and changes with the vehicle’s speed. The optional system (part of the Technology Package) is an audiophile’s dream. It features Dolby Pro Logic II 7.1 Surround Sound, incorporating a 12x40 watt amplifier. It has 14 speakers including a sub-woofer and the system has a six-disc in-dash CD changer. It’s also MP3 format compatible. (I hope you understand all this because I don’t. As I’ve said many times, I only listen to talk radio.)

Rear-seat headphone sockets are available that allow rear-seat passengers to listen to a different audio source from that of the front-seaters. An auxiliary audio input socket for connection to an MP3 player, iPod or other source is standard and fitted in the center console.

A lot of premium equipment is standard on LR2, like keyless starter button, panoramic dual-panel top-sliding sunroof, one-touch up-and-down windows, one-touch-open and close sunroof, front and rear fog lights, power headlamp washers, Rear Park Distance Control, dual-zone automatic temperature-controlled air-conditioning with pollen filter and humidity sensor and an array of other neat things.

Options include high-definition color touch-screen DVD satellite navigation, Bi-xenon Adaptive Front Lighting, Bluetooth hands-free telephone system, the premium radio described above and Sirius Satellite Radio.

For a vehicle as capable, luxurious and versatile as the 2008 LR2, the cost is a relative bargain. Base MSRP is $34,700. The only optional packages are a Technology Package ($3,500, and well worth it), a Lighting Package ($1,050), a Cold Climate Package ($700) and a $400 charge for Narvik Black Exterior Paint. Run the numbers … you’d have to buy them all to barely crack $40,000.

Land Rover doesn’t pump out new models willy-nilly. Truth be told, they’ve only developed eight vehicles in the last 55 years. However, four have been in the last 5 years, attesting to the growing popularity of the brand. In 2006, Land Rover sold 47,774 vehicles in the United States (the company’s largest market) – up 3 percent from the previous year. There are 175 retailers – 90 of them stand-alones. 37 are combination Land Rover and Jaguar dealers. With the introduction of LR2, the company predicts it will pull some people out of luxury sedans and I think they’re right.