From ePHOTOzine’s first look at the FZ35 / FZ38:
A new Venus engine HD has been added to help improve picture quality further and to accommodate the AVCHD Lite video capability. This HD video system is Viera compatible which means that you can either take the memory card straight out of the camera and slot it into the port on the TV or you can link up using the HDMI port on the camera. With AVCHD Lite, the video is compressed further than usual MPEG files which means you can record more. Panasonic says this is done without the loss of quality to the video.