(FORTUNE Magazine) – If you haven't bought a printer in a couple of years, now's the time to consider an upgrade. Quietly, manufacturers have been improving their product. Laser printers that produce sharp black-and-white text become less expensive every day. Cheaper ink-jet printers no longer churn out pages of blurry, uneven type. And color printers can now be found that deliver decent color at a reasonable price.

I recently spent a couple of weeks testing two new devices that may completely change the way you use printers. The Polaroid ColorShot Digital Photo Printer is great for turning your digital photos into paper snapshots. The Hewlett-Packard OfficeJet 720 is a state-of-the-art all-in-one printer, scanner, copier, and fax that's ideal for a home office or small business.

The book-sized ColorShot prints files from a digital camera directly onto Polaroid film. The printer's tray holds a standard ten-print Polaroid cartridge, so you get the same kind of quality you get from a traditional Polaroid camera--not quite as good as 35-mm prints, but a lot better than what you'll derive from a standard color printer.

Setting up the compact (8.5-by-5.7 inches and less than two pounds) ColorShot was easy. I plugged it into my USB port, and Windows 98 immediately recognized it. Using the ColorShot was simple too. The software lets you bring up a "roll" of photos on your PC screen, select the one you want, and zap it to the printer. As if ejected from a Polaroid camera, the film pops out of the printer and gradually darkens into a photo.

The ColorShot's maximum resolution is a middling 160 dots per inch, so the curves are sometimes not quite smooth, and the faces not quite sharp. But you can't beat the convenience of instant snapshots, and you can't beat the price: $299 for the printer and $29.99 for three film packages, or 30 prints.

HP has been making all-in-one devices for years; the OfficeJet 720 ($629) is the best yet. A gray box with pleasing curves, the 720 looks like a cross between a fax machine and a printer but also scans and copies documents in full color.

The secret to HP's domination of the printer business has been its software. So it's no surprise that the 720 is a smart machine, asking you the right questions, offering sensible choices, and cueing you in about what's happening to your document. Stick a document into the manual feed slot, and HP's software pops up on your PC monitor, offering four choices: fax, copy, scan, or E-mail. Choose fax, and you get a form prompting you for the name of the recipient, the number to dial, fax quality, and whether you want to send a fax now or later. The 720 can receive more than 60 standard fax pages, which it stores in memory if it is busy or out of paper.

Scanning a document can be just as easy. The first time I tried to scan in a page of text, the printer software failed to bring up my word processor. Looking for the source of the problem, I found that in clicking through some set-up options, I had declined to register Caere's OCR (optical character recognition) software. I had to call an 800 number for a registration code, which seems like a lot of work for a program that handles only single columns of text. For scanning and editing more complex documents, pay the additional $99 to get Caere's full OCR program. It's worth the price; it converted a page from a press release and made just two or three typos for me to correct. That sure beats retyping.

As for its most basic function, the 720 prints well enough for most small offices. It puts out about four pages a minute, and the text quality (600 dots per inch maximum) is quite good for an ink-jet printer. As with all ink jets, the quality of the color printing depends a great deal on the quality of paper you use. I scanned a FORTUNE cover of billionaire buddies Bill Gates and Warren Buffett and printed it out on standard copy paper. While no one would mistake the subdued colors in my printout for a magazine cover, the 300-dots-per-inch output was good enough to show details of Buffett's flying eyebrows and Gates' perpetual peach fuzz. The 720 did take five minutes to print that cover, but hey--I wasn't exactly waiting for a shot of Tyra Banks and Veronica Webb.