Designed to compete with the Toyota Camry and other midsize family sedans, the Milan is smaller than the Mercury Sable (the car formerly known as Montego).

Milan seats four comfortably.The cabin is inviting, with nice interior materials and better than average detailing.We liked the contrast stitching in the seats.Also, it's an easy car to use.Fold-down rear seats add an extra measure of space and utility.New for 2007, the front passenger seat folds down, adding more utility and functionality.

Four-cylinder and V6 engines are available.The V6 gets an EPA-rated 28 mpg on the highway and comes with a six-speed automatic transmission, a rarity in this class, which gives both better acceleration and better fuel economy than a five-speed automatic.

For 2007, Mercury has added two all-wheel-drive models to the lineup: Milan V6 AWD and Milan Premier V6 AWD.All-wheel drive stabilizes handling, improves traction, and adds confidence in foul weather by sending power from the transmission to all four wheels, instead of just the front or rear wheels.

The Milan ($18,790) comes with a 2.3-liter four-cylinder engine and a choice of five-speed manual or five-speed automatic transmission ($850).

Standard features include ABS, side-impact and side curtain airbags, air conditioning, a premium audio system with AM/FM/CD/MP3 player, an analog clock, an overhead console with sunglasses holder, a covered flip-up storage bin on top of the dash, six-way power driver's seat with manual lumbar, 16-inch wheels, speed control, tilt and telescoping steering wheel with secondary controls, a perimeter anti-theft system, standard auxiliary audio input jack, and remote keyless entry.

Options include a power moonroof ($895), an AM/FM/CD6/MP3 Audiophile system with eight speakers, a rear spoiler, DVD-based navigation ($1995), and Sirius Satellite Radio ($195).

Milan Premier ($20,790) upgrades with leather seating surfaces, automatic electronic climate control, 6CD changer with MP3 and six speakers, leather-wrapped steering wheel with secondary audio, speed and climate controls, automatic headlights, fog lights, puddle lamps, and an auto dimming interior rearview mirror with compass.

Safety features have been upgraded for 2007: The anti-lock brake system comes standard, along with side-impact airbags for torso protection for the driver and front passenger, side curtain airbags for head protection for front and rear passengers, and an anti-theft perimeter alarm system.Traction control is standard on all V6 Milan models in 2007.

The traditional Mercury waterfall grille, as opposed to the Ford Fusion three-bar grille, is surrounded by more conventional combination headlamp units (versus the Ford version's trapezoidal headlamps).

Out back, the high decklid is framed by a pair of bright LED taillamps that look like they came from a Japanese or German car, large and nicely integrated.The side view is pumped up several notches on the Premier version with its 14-spoke 17-inch alloy wheels and relatively fat 225/50R17 tires.

Three color choices are available in 2007 for Milan: Silver Birch, Dark Amethyst and Alloy.In addition, a rear spoiler is available to rev up the appearance factor.

The deeply bucketed front seats were especially cozy.We felt more like we were sitting in them than on them.

The rear seat folds down in 60/40 fashion, enabled by an easy-pull latch on each side, to eliminate leaning over the decklid opening and fumbling for seatback latches.The interior is roomy enough for a 6-foot, 4-inch passenger to sit behind a 6-foot, 4-inch driver, with real headroom.The rear door panels are scooped out for more elbow room.The rear armrest packs two cupholders, for a total of six.

With the seat down, you get the 15.8 cubic feet in the trunk plus another 46 cubic feet of cargo space behind the front seats, making it into a once-in-a-while station wagon.A fold-down front passenger seat is standard on all 2007 Milan models, adding to the vehicle's versatility.

Storage cubbies are all over the place, two in the console, one quite large one at the top center of the dash with a latching lid, two more in each front door pocket hollowed out to take a Big Gulp cup, and one in the bottom center of the dashboard, all of which add up to convenience and ease.The quality of design and materials for a car in this price class was generally quite high, satisfying to touch and look at.

The premium eight-speaker sound system played our favorite compilation CDs exactly as they sound at home on our high-end equipment, minus a bit of bass.

We thought there was too much glare off the main instrument cover, likewise with the radio face and the otherwise lovely analog clock.

The engine feels a bit choked and a bit underpowered, and doesn't sound like a powerful engine when prodded.A full-throttle kickdown maneuver will also get the front end to pitch, too quickly and too high for our taste, leaving the front tires scrambling for traction and direction for an annoying split second.

We found the steering to have a fairly hefty feel and effort at the wheel, but it was a bit too disconnected from the road surface for our taste, a minimum-effort, minimum-feel tuning, but most people will probably not notice much difference either way.High-speed handling showed predictable, normal and usual levels of understeer.

The ride, over the universally awful streets of Detroit, was quite good, with lots of compliance to soak up bumps, not too much body roll, and quiet, smooth operation.

The brakes, on the other hand, were strong and direct, without a lot of wasted pedal travel before deceleration starts to happen, and low effort-to-stop ratio.

NewCarTestDrive.com correspondent Jim McCraw filed this report from Dearborn, Michigan.