High-performance Japanese saloon cars continue to be developed at an alarming rate. Mitsubishi seems to introduce a new version of the Lancer Evo every five minutes, leaving rival Subaru with no option but to continue coming up with tweaks for the Impreza.Here's the latest offering from the Subaru camp. The 2005 model-year Impreza WRX STi Type-UK is, like the car it replaces, quite well described by its title. It's based on the normal Impreza WRX, but with a huge amount of input from Subaru Tecnica International, which has, for example, replaced around 80% of the turbocharged two-litre engine's components in its efforts to raise the power output to 262bhp. The Type-UK suffix indicates that this car is significantly different from the STi sold in Japan, though the changes are mostly to do with things like security and emissions rather than performance or handling.Headline features of the STi include items which will keep pub conversation going for quite a while but do not, I think, add anything significant to the ownership experience. The fact that there's a dashboard button which allows you to spray water into the turbo intercooler comes into this category, as does the existence of driver-adjustable control for the centre differential. This allows you to choose between sharp turn-in and stable straightline running, but realistically the effect is not going to be noticeable on public roads unless you are driving insanely.More importantly, there's a new and quicker-acting front differential, a yaw-rate sensor and revised suspension which increases the wheelbase by 10mm, widens the rear track by 15mm and adds 1.5 degrees to the castor angle. Springs and damper rates have been re-thought, and there are stiffer anti-roll bars.Clearly the STi folk have been busy here, but the basic Impreza package of soft but well-damped suspension aided by a relatively low centre of gravity (contributed by the layout of the flat-four engine) and with power distributed among all four wheels remains unchanged. This is a great basis to work from, and the new-for-2005 adjustments seem to be without exception beneficial to the package. The last STi I drove was great, but this one is better - even more sure-footed when you're driving it quickly, yet even more sedate and user-friendly when you're just pottering around, in the unlikely event that you ever want to do that.This dual personality is largely supplied by the engine. It has the same power as it did before, and nothing really happens below 3000rpm, when the turbo kicks in good and proper. Keep the revs below this figure and the STi is very tame, with a ride quality which I actually rate more highly than that of the standard WRX. Stay above 3000rpm (not a difficult job with six very closely-spaced gear ratios to choose from) and you have to concentrate hard because of the power, but at the same time the sovereign chassis and the excellent brakes do their best to help you.There are yet more refinements. The steering is more precisely mounted to the rest of the car, and there's a damper in the system to reduce kick-back over bumps (which does seem effective - I spent some time on fairly rough back roads and found that the steering wheel gave enough information about the state of the tarmac, but not too much).Subaru has also added covers beneath the engine and floorpan to improve underbody aerodynamics, and while the effects aren't noticeable to the driver there have been improvements in both top speed and fuel economy over the previous STi.In the form tested here, the STi is a very strong rival to Mitsubishi's superb 260bhp version of the Evo VIII. But most owners don't stay with this specification for long. Around 70% opt for a Performance Pack developed by Prodrive, the company which runs the World Rally Championship team but had no input into the standard STi. Earlier cars had Prodrive Packs which were simply body kits, but while there's a styling element to the latest one it also includes a power upgrade to just over 300bhp, putting the STi into Evo FQ territory. 0-60mph acceleration dips to 4.6 seconds and the top speed exceeds 150mph, all at a cost of £1995.I can see the appeal, but to me the 260 is the best of the Evos for road use, and I don't see much use for the extra power in the Subaru either (other than talking about it or employing it to catapult away from traffic lights). What I like is a combination of just enough power with a superb chassis, and that's exactly what you get with STi's conception of the Impreza.Second opinion: Yes, the dual-purpose nature of this car is quite remarkable, because while being phenomenally quick over the ground if you take full advantage of the power, the excellent traction and the grip, it has the ability to potter about in a demure pussycat fashion. At least, in as much of a pussycat fashion as you can manage in a car with such tigerish looks. That bonnet air scoop is obtrusive enough to give small drivers a very restricted view of what's immediately ahead of the front bumper, and the tall rear spoiler (as well as the gold-coloured wheels) can't help but draw raised-eyebrow glances. On the other hand, the spoiler is so high-set that it doesn't obscure the rear view. The STi specification is impressive, and it helps the Subaru to be a very fair everyday car with unexpectedly good ride quality, rather than a firmed-up Petter Solberg-style special stage racer. But what a trackday machine! Ross Finlay. Engine 1994cc, 4 cylinders Power 262bhp Transmission 6-speed manual Fuel/CO2 25.4mpg / 265g/km Acceleration 0-62mph: 5.2 seconds Top speed 151mph Price £25,995 Details correct at publication date