| First Drive |Turin, Italy | Fiat 500 |

On the fourth of July, 1957 Fiat launched the original 500, effectively putting post-war Italy on wheels and giving the nation a new sense of freedom and mobility never imagined before the war. It is fitting, then, that we're back in Italy on the 50th anniversary of the original car's launch to celebrate with what must be the entire city of Turin and every original Fiat 500 still in existence. But more importantly, we're also embracing the future in the shape of the all-new 500, arguably Fiat's most important new car in years.

While the Bravo and Punto are the volume sellers for Fiat, the 500 is a vital part of the company's identity. It represents all that is good about Fiat in terms of style, packaging and value; it's almost Fiat's flagship, even if it's dinghy-sized and rowboat-priced. Fiat knows this and has decided to launch the new car amid incredible fanfare and ceremony. On the river Po in Turin Fiat has built a massive platform on which to stage the extravaganza. Think of the Eurovision except without the excitement of competition. We're watching from across the river on a huge, purpose-built grandstand along with 5,000 of Fiat's (and Italy's) nearest and dearest. There are arty performers and original Fiat 500s zipping around on propelled floats in the water. There are more antics in the air as helium-filled models and daft human sculptures descend on to the stage. It's more than 18 hours since I left home and we still haven't even seen the car we're here to drive.

The following morning, all 1,500 invited journalists are packed into the ice-hockey auditorium at the Olympic stadium and subjected to another tortuous performance - this time a bloated, two-hour press conference. Having been teased with pictures for a year-and-a-half now, it's a little 'exciting' to finally see the 500 up close and personal. And my God it looks good. It's been styled to emulate the cuteness and lovability of the original car, but re-interpreted for 2007. It's never easy to reinvent an icon so you can be sure it took many, many hours in the design studio to get this car this right. Every angle, very detail, every surface is exquisite; it's a complete and polished piece of design.

Frank Stephenson was the man behind the re-invented Mini, which makes him ridiculously over-qualified to take Fiat's precious icon and make it look fresh and cool in 2007. Indeed, the 500's design is so perfect that it suddenly makes the Mini look like it's trying too hard to be stylish and funky. The Fiat 500 is effortlessly appealing and incomprehensibly desirable. It's one of those cars you just fall in love with the moment you see it - so much so that in spite of its adorable looks and diminutive shape even a young heterosexual male can look good and feel comfortable driving around in one. No, I'm not being sexist or homophobic, just honest; straight men don't wear make up or watch films about young women 'coming of age' in New York and we certainly don't drive cutesy little cars unless under extreme duress. But the 500 is different. It's like lip balm or moisturising shaving foam or 'The Devil Wears Prada' - feminine products that men can enjoy without fear of retribution. It's genderless and classless, despite its puppy-dog appeal. Fiat sums it up nicely, in fact, describing the 500 as an iPod with wheels. The only black mark on the 500's styling copybook goes to the rear lights, which are just too like the revised Mini's to be a coincidence, especially at night. It's the only area in which the car lacks originality.

Inside, the 500's design is executed with the same attention to detail as the exterior, using retrospective design where it makes sense and staying modern where it doesn't. The dial cluster, for example, apes the original's, but manage to contain the speedometer, the rev-counter and a trip computer in the space normally occupied by a single dial. More importantly, it works well, proving easy to read and a delight to behold. The main dashboard facia is painted the same colour as the exterior and feels very expensive and satisfying to touch while the leather on the steering wheel feels equally as tactile and upmarket in the hands.

The cool retro gearknob looks like it should be heavy and cold (like the original Bakelite shifter), but it proves to be disappointingly light and plasticky to the touch. Indeed, despite Fiat's claims it has topped the Japanese for quality there are still quite a few so-so plastics below the eye line and it still smells of that unmistakable Fiat glue. To be fair, though, compared to anything else in the segment it really does have a high-quality, upscale feel. Interior room, as you can imagine, isn't very expansive and there are no clever sliding rear seats, but it's better than a Mini in there and just fine for kids or adults for short stints. Front seat passengers have a decent amount of space and while the 'sport' seats themselves are comfortable they offer almost no lateral support and without a reach-adjustable steering it's difficult to get comfortable if you're tall. As a package, then, the 500 is really only average and is actually a little disappointing in places, but in terms of interior style and finish it's a peach.

Our test car was powered by Fiat's smooth 1.2-litre turbodiesel engine, which is mated to a slightly vague five-speed gearbox. With 0-62mph taking an unremarkable 12.5 seconds and a top speed of 103mph it certainly wasn't any kind of fireball on the mountain roads above Turin, although it did cruise reasonably well and it barely makes a peep unless you rev the nuts off it. A revised version of the 1.2-litre FIRE petrol engine is also available and boasts almost identical acceleration and emission figures even if it's a wee bit thirstier. The six-speed, 100hp, 1.4-litre model was the car we all wanted to drive, though we'll have to wair until the car arrives on these shores.

All share the same MacPherson front and torsion beam rear suspension, though the sporty 1.4 gets quicker steering, bigger brakes (with red brake calipers plus discs in the back) and ESP. The good news is that ride quality is excellent, even on optional 16-inch alloy wheels, and grip levels are high making it a very comfortable and 'planted' car to drive. What it isn't, though, is involving. Turn in is sharp, the steering is fairly precise and there's a bit of feedback, too, but the weighting is very artificial making it feel somewhat detached and disinterested. There's also a lot of body roll and the seats do a hopeless job of holding you in place which means it's not the kind of car you'd take out for a thrash just for the sake of it. There's potential there, no question, and I'm sure the Ford Ka, which shares the 500's underpinnings, will exploit it fully. But the Fiat places more emphasis on style and comfort and isn't the chuckable little rogue its styling suggests.

In terms of equipment, we expect the entry-level model to have the usual remote locking, electric windows and mirrors, CD/MP3 player and a trip computer. The popular mid-range model will add air conditioning, Bluetooth, alloy wheels, a leather steering wheel, tinted rear windows, a height adjustable seat and heated mirrors. Top versions add climate control, a glass roof, lots of chrome and a split rear seat. All three trim levels are available with all three engines, which helps Fiat to reach its goal of offering 500,000 different configurations for the car (though most of these are down to wheel, accessory and sticker packs - very Mini-esque). It's also worth mentioning that all 500s will have an incredible seven airbags as standard, including a driver knee airbag, which Fiat says will help make it the first five-star Euro NCAP city car ever.

Fiat has said it will only build 120,000 new 500s a year and will leave the volume sales up to its sister car, the Ford Ka. That's not to say the 500 will be an exclusive or expensive car, just that limited volumes will ensure the demand versus supply ratio works in the company's favour, in much the same way the Mini does. I have no doubt that the 500 will be an enormous success given how accessibly trendy it is and I'm sure that there will be another party in 50 years' time to celebrate the little car that made Fiat cool again.