As almost everyone has said so far when discussing the 208, Peugeot's main challenge in designing a new supermini for the second decade of the 21st century has been to recapture the appeal of its long-ago predecessor, the 205, and perhaps some of the popularity of the 206 which, though less loved, at one time even outsold the Ford Fiesta in this country.These days, the Fiesta's position seems beyond attack, but the 208 is nevertheless the best small hatchback Peugeot has devised in three generations. It doesn't feel anything like the 205, because no car on sale in 2012 can possibly feel like one built in the 1980s. On the contrary, Peugeot has clearly put more effort into looking forward than back in some aspects of the new car's design.For example, higher-specification models such as the Allure are fitted with a multifunction colour touchscreen which allows the user to exert control over various functions using finger swipes rather than prods. Older and less technology-literate buyers may find this confusing, but almost anyone for whom the 208 is their first car will find this method of operation simple and obvious.The same thinking which led Peugeot to offer this system has also been applied at a much more detailed level. You, being a sensible person, would probably never drive off with the handbrake partly engaged or let the fuel in the tank drop below a certain amount, but during this test I did both, and in each case the warning sounds that the 208 emitted were musical and carefully crafted chimes, rather than beeps or bongs.Less radical but still unusual is the way Peugeot has given the 208 a small, low-mounted steering wheel and a high-set instrument panel. Other commentators view this with disdain. I love it. Perhaps because I'm above-averagely tall, my view of the dials is partially blocked by the wheel of nearly ever car I drive. In this one, I can see everything clearly without having to move my head or adopt a driving position that doesn't suit me.In other ways the 208 is quite conventional. Visibility generally isn't great, and at the back Peugeot has made no attempt to overturn the current trend for blocking as much of the view as possible. If anything, it has managed to do an even worse job here than its rivals.Rear-seat legroom isn't sufficient for a six-footer if there's another one sitting up front, while rear luggage space with the seats in place is decent but in no way special at 285 litres, exactly the same as Vauxhall and Volkswagen offer with the Corsa and Polo.The test car used Peugeot's 82bhp 1.2-litre three-cylinder petrol engine. It's a lovely little unit - not as interesting as Ford's smaller but more powerful turbocharged EcoBoost, but very quiet and reasonably perky (though if you want better economy and performance, and are prepared to pay more up front, the 92bhp 1.6 diesel in the range is well worth your attention).On the EU test, the 1.2 averages 62.8mpg. In real life, without ever pushing particularly hard, I got nearer 50mpg, which seems about right for a small petrol-fuelled hatchback. CO2 emissions are rated at 104g/km, so you have to pay some Vehicle Excise Duty (only £20 a year) and, if applicable, the London congestion charge. If Peugeot had fitted this engine with a start/stop system, as it has others in the range, the official CO2 level would certainly be 100g/km or less and you'd be exempt from both, but it hasn't and you're not.The ride quality over bumpy surfaces is a bit jittery, as if the 55-section tyres (on 16" wheels) are slightly too low-profile for the suspension to deal with, but on smoother ground the 208 is very graceful, soaking up larger road undulations particularly well.The steering action is beautiful, but the other major controls could do with some work. Every 208 I've driven so far has a very high clutch biting point, which makes smooth starting difficult to achieve, and you have to make sure you pull the gearlever as far to the right as it will go before attempting to engage fifth, otherwise there's a strong chance you'll accidentally select third instead.Allure versions of the 208 are fitted as standard with those 16" wheels mentioned a couple of paragraphs ago, plus dual-zone air-conditioning, privacy glass, LED daytime running lights, sports seats, automatic lights and wipers, automatic lights and wipers and an auto-dimming interior mirror. As with the cheaper Active, a USB port and Bluetooth connectivity are also on the list of standard items, as is a split-folding rear seat. Some exterior chrome is also applied to Allures, but only the three-door ones.Euro NCAP crash tested the 208 earlier this year and did not give it an outstandingly high mark in any category. It's among the best superminis for pedestrian protection, though, and performed sufficiently well to earn a five-star rating. Engine 1199cc, 3 cylinders Power 82bhp Transmission 5-speed manual Fuel/CO2 62.8mpg / 104g/km Acceleration 0-62mph: 14.0 seconds Top speed 109mph Price £13,895 Details correct at publication date