(FORTUNE Magazine) – You could argue that Jaguar owners are among the world's most stubborn people, because buying a Jag has usually involved tradeoffs. In the past it meant accepting dubious quality and reliability in exchange for racing heritage and driving excitement; more recently it meant a willingness to cope with prehistoric packaging and bizarre ergonomics that made passengers cranky and caused drivers to hunt for switches in out-of-the-way places. Jag owners found themselves defending their cars' British character to the speed-crazed, tech-obsessed drivers of Mercedes and BMWs.

But suppose Jaguar produced a car that didn't require any compromises? Well, the 2004 XJR comes mighty close. It's lightning-fast and comfortable as a cashmere sweater, it boasts an unbeatable ride, and it glitters the way an expensive car should. The XJR catapults Jaguar into the highest levels of luxury-cardom for the first time. Best of all, it does so without compromising any of the flair that makes a Jag a Jag.

The XJR is the high-performance version of the new XJ, the second reworking of the big Jaguar sedan that first saw life in 1968. The XJ is longer, wider, and taller than previous models, so the Jaguar driver and his passengers enjoy unexpected amenities like shoulder space, rear-seat legroom, and a trunk that isn't consumed by the spare tire. Bigger usually means heavier, but the XJR weighs some 100 pounds less than its predecessor because its structure and body panels are made out of aluminum--an adventurous plunge into new technology that delayed the launch of this car for several months.

At $74,995, the XJR costs $15,000 more than a base XJ, but it has bigger wheels, better brakes, and a supercharged engine that produces 390 hp and launches the car to 60 miles per hour in five seconds flat--Porsche speed. The muscle is never obtrusive. The incomparable air suspension comforts the occupants while maintaining the car's composure under any but the most demanding conditions.

As for those imperfections referred to earlier, the instrument panel remains idiosyncratic without being either attractive or functional, and the design is traditional to a fault. But to call the XJR the best Jaguar yet is to damn it with faint praise. Better to say this is the first Jag that Jag owners will never have to apologize for.

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