Honda calls it the Active Torque Transfer System (ATTS), and it takes front-drive performance cars another step closer to parity with their rear-drive competitors in terms of absolute handling. ATTS distinguishes the standard Prelude from the SH model, which was our test subject.

Here's how it works: When a front-drive car hustles around a corner, its front tires have to transfer power to the ground as well as steer the car. That--plus the pronounced forward weight bias that goes with having all the powertrain stuff up front--is why front-drive cars like the Prelude are more prone to understeer than their rear-drive counterparts.

Understeer describes a car's resistance to turn-in. The faster the entry speed to a given corner, the more the car wants to go straight ahead.

ATTS addresses this trait through a clever set of mechanical functions that automatically transfers engine torque to the outside front wheel, while increasing its rotational speed. Transferring as much as 80 percent of the power into the outside front wheel, which typically bears the heaviest load in hard cornering, compensates for the extra load and restores balance.

It's a clever Honda solution to a problem no one else has really managed to solve--and it works.

The latest generation Prelude is slightly larger than the previous generation. The wheelbase has been stretched nearly 1.5 inches, overall length has increased 3.2 inches, height by 1 inch. It's slightly heavier, partly because of the dimensional increases, partly because Honda's chassis engineers have reinforced the platform to increase overall rigidity.

We're impressed with the results. This improvement is all the more remarkable given the previous bodyshell was already one of the best in its class in terms of stiffness, and this rigidity is the cornerstone to greatness in the ride and handling development. Like the last generation--and all other Hondas, for that matter--the Prelude uses Honda's double wishbone suspension fore and aft, with powerful disc brakes all around. ABS is standard equipment, and 16-inch aluminum alloy wheels replace the previous 15-inch wheels.

Honda's stylists seem to have looked to the third generation Prelude for inspiration in designing the latest model. The roofline is more formal and the overall appearance more conservative compared to the swoopy lines of generation four. The most distinctive element is a pair of vertically rectangular headlamps, reminiscent of the Mercedes SLK roadster.

Unlike the previous generation, the Prelude is available in only two models. The less potent (and less expensive) S and Si versions have disappeared. The surviving engine is the 2.2-liter dohc 16-valve VTEC aluminum four-cylinder, with a new block and a slight increase in output, to 195 horsepower.

Honda also offers a new automatic transmission option for the Prelude, a four-speed called Sequential SportShift, that allows the driver to shift manually as well as operate in full automatic mode. Similar in concept to the Chrysler AutoStick and Porsche Tiptronic, it adds more driving fun to automatic editions, but also adds weight and cost, and subtracts from the all-around performance. AutoStick editions come to the party with 190 horsepower and are not available with ATTS.