Honda's CR-Very Nice Crossover

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For one, the interior feels incredibly spacious for so tiny a vehicle. It has significantly more passenger and cargo volume than most of its competition.

There's no doubt the CR-V is a mom (and dad) magnet, especially given its sensible pricing and modest sizing. An innovative use of a convex mirror built into the sunglasses compartment provides a handy way to quickly assess kid status without turning your head away from the road. Toyota has a similar feature in its minivan—but anything that adds to "momnipotence" is a good thing.

Honda's navigation system, which comes standard in the $28,000 model I test drove, is a winner. Touch-activated and easy to use, switching between entertainment and navigation functions is simple and safe. The display can be customized with different visualizers that change to the beat when you're listening to music.

The press of a button on the front of the unit flips the screen down to give drivers access to a PC card slot that can be used to store digital music files—impressive on so tight a budget. A six-CD changer is stowed conveniently in the center console between the driver and passenger seats.

The lack of a third row of seating is acceptable—the vast majority of third rows go largely unused. Less acceptable are the tumble-forward seats that limit the amount of room in the back when the seats are down. You'd think in a vehicle so ergonomically intelligent, engineers would have figured out a way to hide the seats flat into the floor.

Safety results are impressive. In all of National Highway Traffic Safety Administration's crash tests, the vehicle earned the maximum five stars. Front side air bags, side curtain airbags, traction control, and ABS brakes are all standard safety equipment.

Buy It or Bag It?

Honda's advertisements play on the initials of CR-V with the tagline "something new to crave." Like most auto advertising, that's a bit of a stretch. The CR-V isn't the kind of car that fills a long, anguished yearning. But it is the kind of car that's overwhelmingly winning for its sheer smarts.

Get ready to hear a lot more about small crossovers throughout 2007 and into 2008. Nissan (NSANY), Volkswagen, Volvo—everyone is climbing on the bandwagon. But even the costliest of these is going to have a long way to go to match the third generation CR-V.

Click here for the slide show to see more of the 2007 Honda CR-V.

Matt Vella is a reporter for BusinessWeek.com in New York.