MINIs have been flying out of BMW's Oxford factory into the hands of eager customers in such numbers that you might have expected the 2007 update to be little more than a very mild facelift. It's true that only a sharp-eyed observer could instantly tell the new car from the old one, but underneath that very familiar exterior a lot has been going on.Actually, and contrary to first impressions, the exterior itself is also pretty new. Every body panel has been changed, and the car is now around 60mm longer than it used to be. But the real advance is in the details, the most significant of which is the use of a whole new series of engines.The importance of this is as apparent in the Cooper tested here as in any other car within the range. Like all the first-generation MINIs other than the One D, the previous Cooper used a 1.6-litre petrol engine supplied by Chrysler, and it's fair to say that this was not the car's strong point.Now it's been replaced by the similarly-sized engine co-developed by BMW and PSA Peugeot Citroen. Maximum power is up by just 5bhp to 120bhp, and in conjunction with a marginally better drag coefficient this means the new Cooper is slightly quicker than its predecessor. More importantly, it's vastly more economical at 48.7mpg on the combined cycle (though the itty-bitty 40-litre tank means you'll be lucky to achieve more than 400 miles between fuel stops) and the CO2 emissions are correspondingly lower at 139g/km.The 120bhp output means that the Cooper only barely qualifies as a warm hatch, never mind a hot one. On the other hand, the close-ratio six-speed gearbox means that you can keep the engine buzzing if you need to. The Cooper doesn't have anything like the straightline performance of the 175bhp turbocharged Cooper S, but in the real world it never feels slow.And that's because it handles so well. Every previous-generation MINI (with the exception of the Cooper S, which I felt could get a bit hairy at times) handled beautifully, and a number of suspension modifications make the new one even better. Admittedly the ride quality isn't great, but it's not as harsh as it used to be, and in any case you soon realise that the car reacts positively to every bump and dip, sorting itself out quickly so as to be ready for whatever comes next. I wish more performance hatchbacks behaved like that.I wish they could match the MINI's cornering ability, too. We are truly in the higher reaches of chassis development here. The Cooper turns in to corners fabulously well - almost alarmingly so, if you've recently driven something less responsive - and from there to the exit the front tyres grip the tarmac as if they were actually clawing into it.They're helped by the fact that the rear suspension is stiff enough to allow the back end to follow the front through the corner, though in most situations it doesn't go to the extent of beginning to slide. The tail is most likely to start wagging if you apply the brakes hard on a surface with variable camber; they are so strong, they feel like they would stop a bus, and in a situation like this they can cause enough movement to send the pulse rate of an inexperienced driver soaring.Other than that, the Cooper is just about the best-balanced front-wheel drive car you can buy. It makes most of the true hot hatches with twice the power and double the expense look ridiculous, and I'd even go so far as to say that its behaviour is what you would expect of a really well set-up race car of the same layout.And yet it doesn't feel even remotely like a race car. If you don't mind the firm ride, it's a perfectly acceptable everyday fun machine whose full seriousness doesn't become apparent until you want it to. This is the car that every other manufacturer of a sporty front-wheel drive hatchback should be studying and learning from.The driving dynamics and the style are what have always defined the MINI, and by comparison most of its other elements fade into unimportance. However, it's worth noting the good and bad points. One definite plus, as far as I'm concerned, is the fact that - as a tall driver - I can get far more comfortable in the latest MINI than I could in the previous one. There's more space, and at last the steering wheel is adjustable for reach as well as for height.As far as this test was concerned, it was just as well, because I had to spend five days driving the Cooper round the UK (or at one point sitting in a 42-mile traffic jam on the M25) and I needed all the comforts I could get. There was too much jiggling over lumpy tarmac on motorways, but I'd be the first to admit that the MINI was never meant to be a motorway cruiser.It's clearly not meant to be a load-carrier either. There is not enough room for the amount of luggage required by a professional gentleman who is spending the best part of a week on a business trip - the boot holds just 160 litres, and although I could have increased this to 680 litres by folding down the rear seat I didn't think it would be a wise move to have my valuables open to public inspection when the car was parked.So I used the seat to carry my less important luggage instead. It's about all you can do with it. For all the talk of increased interior room, it's unrealistic to expect that you can carry four people in a single MINI. Anyone attempting to sit directly behind me would literally have to have their legs amputated first.I'm not sure about the central speedometer, either. It was cute in the previous MINI, but it has now grown to the size of a dinner plate, and at any UK-legal speed the needle points to a figure in the other half of the car from where you're sitting. However interesting it may be as a design feature, I found it irritating to use - but not so much that it seriously coloured my judgement of what remains an astonishing little car whose triumphant sales record is completely justified. Engine 1598 cc, 4 cylinders Power 120 bhp @6000 rpm Torque 118 ib/ft @4250 rpm Transmission 6 speed manual Fuel/CO2 48.7 mpg / 139 g/km Acceleration 0-62mph: 9.1sec Top speed 126 mph Price From £13471.00 approx Release date 18/11/2006