And for its part, the high-performance Cadillac CTS-V can compete with the best high-performance sports sedans in the world (BMW M3, Mercedes C63 AMG, Audi S4) at a much lower cost.

This doesn't surprise us, quite frankly, because we've been watching the CTS for some time now.The original car was good and they've been improving it ever since, particularly in the area of refinement.What may surprise you about the CTS is its level of refinement.

The CTS boasts responsive handling and excellent high-speed stability, yet it's smooth and quiet around town or when cruising at highway speeds.The ride quality strikes a perfect balance between smoothness and handling.The steering is accurate, with good feel and a nice, weighty demeanor.The car feels solidly put together, and it's quiet underway.Inside is an attractive cabin trimmed with nice materials that exudes an airy, open feel.Everything is easy to operate.

Simply stated, the Cadillac CTS is a very enjoyable car.

The CTS and CTS-V feature sophisticated suspension systems developed, among other places, at the world-famous Nurburgring race track in Germany.Called the Nordschleife, the 14-mile northern loop of what was the old Nurburgring circuit is considered the toughest, most dangerous, most demanding purpose-built race track in the world.A 2009 CTS-V posted what may have been, at that time, the fastest lap at the Nordschleife for a standard production four-door sedan, an impressive feat given the hot rods BMW, Mercedes, Audi and others routinely roll out.To prepare for this lap John Heinricy from GM's performance division simply shifted the automatic transmission into Drive and let it do its thing.

New for 2010, is a 3.0-liter V6 engine rated at 270 horsepower and 223 pound-feet of torque.Though smaller in displacement, the new engine offers more power than the previous 3.6-liter that came standard.Meanwhile, an optional 3.6-liter V6 is available with 304 horsepower and 273 pound-feet of torque.We found both engines smooth and responsive.They are thoroughly modern in every way, boasting all-aluminum construction and double overhead-cams with variable valve timing and Direct Injection for the optimum in power, fuel economy, and emissions.Either is available with a six-speed manual or six-speed automatic transmission.

The 2010 CTS models come with new features such as 19-inch polished alloy wheels with 245/45ZR19 tires, an air filtration system that takes care of cabin odors, a suede-trimmed steering wheel, a wood trim package for the CTS-V, along with new colors and repackaging of the options.

The Cadillac CTS uses rear-wheel drive, which is the best layout for performance sedans.But it's also available with all-wheel drive.The AWD uses an active transfer case that normally applies 40 percent of the power to the front wheels, 60 percent to the rear, but in slippery conditions can apply all of the torque to either axle.A limited-slip differential is available.

The Cadillac CTS-V has a supercharged 6.2-liter V8 that makes 556 horsepower at 6100 rpm and 551 pound-feet of torque at 3800 rpm; it is available with either a six-speed manual or six-speed automatic.CTS-V is rear-wheel drive.The CTS-V is a genuinely fast car.Cadillac says it's capable of 191 mph and 0-60 mph performance in 3.9 seconds.We found the CTS-V to be one fast ride at Infineon Raceway in Sonoma, California, capable of lap times on the sinewy circuit nearly as quick as a NASCAR Sprint Cup racecar.The CTS-V rides on the firmer side, much like the European luxury sports sedans do.

CTS standard features include leather seating surfaces, dual-zone automatic climate control, OnStar with turn-by-turn navigation, a Bose eight-speaker sound system with CD, MP3 and auxiliary capability, remote keyless entry and programmable central locking, power windows with express-up-down on the front and express-down on the rear, power driver's seat and XM Satellite Radio.

The optional Luxury Package ($3,400) for the CTS with 3.0-liter V6 adds a six-disc CD changer, Bluetooth, a cargo convenience net, accent lighting, memory, heated and 10-way power driver and front passenger seats with power lumbar, theft deterrent alarm, universal garage door opener, wood trim, and leather-wrapped steering wheel.The Performance Package ($5,000) adds foglamps, HID headlamps, limited-slip differential, V-rated tires, performance brakes, sport suspension and some additional features.The optional AM/FM/CD/MP3/DVD audio system ($3,145 with 3.0-liter V6, $2,145 with 3.6) has Bose 5.1 Cabin Surround Sound, 10 speakers, a hard-drive, HDD-based navigation, XM NavTraffic/Real Time Weather and USB connectivity.

The Premium Package for the CTS with 3.6-liter V6 ($6,095) includes cabin filtration, the high-end sound system with navigation, keyless entry, remote start, rear park assist, heated and ventilated seats, power tilt and telescope steering column with memory, moonroof, and numerous luxury and convenience features that are parts of other packages.The Performance Package ($1,840 with manual transmission, $2,090 with automatic) includes 19-inch polished wheels, performance tires, steering wheel-mounted paddle shifters (with automatic transmission), fog lamps, performance suspension, limited-slip differential, and performance brakes.In addition, there are several stand-alone options, including the moonroof, polished alloy wheels and various paint choices.

The CTS-V ($60,720) features a supercharged V8, a limited-slip differential, Brembo disc brakes with six-piston front and four-piston rear calipers, P255/40ZR19 tires in front and P285/35ZR19 tires in the rear, and 10-spoke alloy wheels measuring 9.0 inches wide in front and 9.5 inches wide in the rear.The CTS-V also has distinctive exterior details, including a mesh grille and appropriate badging, to make it stand apart from the normal CTS.The CTS looks clean, elegant and modern, but the CTS-V, with its few changes, takes on a more assertive appearance.Optional for the CTS-V are Recaro front seats ($3,400) and a suede steering wheel ($300).

Safety features that come standard on all models include front, side and side-curtain airbags, ABS and Stabilitrak electronic stability control and traction control.Optional all-wheel drive improves safety further.

The eggcrate grille on the CTS is in keeping with the rest of the Cadillac lineup, plus it provides a generous supply of incoming air for the engine, brake and transmission cooling functions.The large lighting units at the front and rear make good use of LED (light-emitting diode) technology: lots of light and lots of style for little electrical load.The taillights, rear quarter panels and decklid also fit the Cadillac theme.Below the rear bumper are exposed dual exhaust tips.

The CTS-V is distinguished by functional features.The power dome hood, distinctive wheel and tire package, and the bold mesh grille suggest intent for serious driving.The larger mesh grill is for improved airflow.The power dome hood is as small as they could make it.Big brake ducts help cool the big two-piece Brembo calipers.The center brake light reduces rear lift.The dual exhaust provides better performance.

The dashboard is fairly low and away from the front seats, which gives an airy and open feel to the car.The center stack on the CTS is beautifully done, easy to read and use, with some interesting readout placements here and there.While the previous-generation model had a cold interior, the current CTS boasts a lovely cabin indeed.

We found the comfortable front bucket seats held us down and in place behind the wheel, including some enthusiastic driving on central California's windiest, curviest roads.

We really appreciated the range of adjustments offered by the power seats and the power steering column.The tilt-and-telescope column offers ultimate comfort and proper driving position.The instrument package is complete, easy to read, and graphically pretty.

In short, we found the CTS cabin to be a nice place to sit and take a drive.The driver is held in securely yet comfortably to properly operate the car, and the passengers enjoy a feeling of ease, confidence and luxury.It's great to see Cadillac offer such a terrific interior.

The AM/FM/XM Bose 5.1 sound system with the 40-gigabyte hard-drive, iPod connector and USB port offers the ultimate in musical enjoyment.Using the navigation screen, it's easy to switch back and forth between the three broadcast and three stored-music formats by simply touching the screen, and the blue display is large enough to be read from the back seat.We think it's one of the best, most fun-to-use sound systems available.Many other luxury cars have audio systems that are fussy or difficult to operate.

The CTS-V has a sportier cabin, with a thick-rimmed steering wheel available in suede.The dead pedal, allowing the driver to brace the left leg, is optimized for racing.A Recaro option is available with 14-way adjustable seats, including bolsters that can be pumped up for hard driving then deflated for cruising.

Both V6 engines have dohc, variable valve timing and direct injection.As a result, they are both responsive and lively.The 3.0-liter, with its 270 horsepower, is a very good standard engine, although it doesn't match the power and torque of the 3.6-liter V6.The Direct Injection gives each engine extremely good throttle response, and also enhances fuel economy and emissions.Somewhat surprisingly, there is little or no penalty in fuel economy with the larger engine, so, if the additional expense is not an issue, we have to recommend it.With its 304 horsepower it feels ready to go out and play anytime you want, delivering a really solid combination of power, torque and assertive sound whenever the throttle is opened all the way up.

The six-speed automatic is very quick and positive to shift manually, up or down, with a little bit of throttle blip on the downshifts to keep the drivetrain happy and to keep the tires from skipping and chirping.The six-speed manual offers an easy clutch and requires only a light touch on the shift lever to change gears; it is surprisingly good.The choice comes down to your preference.We liked both of them.

The steering is sweet to drive, very accurate, with good feel and a nice, weighty demeanor.The steering system uses a forward-mounted power rack-and-pinion that pulls, rather than pushes, the steering arms.(It pulls on the steering arm of that front tire which will be on the outside in the turn, so in a right-hand turn it is pulling on the left-side steering arm, placing that side in tension rather than compression.)

All-wheel drive is optional on the CTS.We found it makes the car feel very stable and adds to driver confidence on winding roads.We recommend getting if wintry weather or big rain are part of the seasonal picture.

The brakes are excellent, equipped with ABS and Electronic Brake-force Distribution.They provide very good stopping power, even for a car that tips the scales at well over two tons.

For all its steering, cornering and handling prowess, the CTS doesn't seem to exact any penalties in quietness or harshness over the road, an impressive combination.It feels very solidly put together.It's quiet inside in all modes other than wide-open throttle.Its 17-inch high-performance tires seem to assist it with this balance.

Driving the CTS-V is a completely different experience from that of the CTS.It's not a lightweight at well over 4000 pounds, but with 556 horsepower and 551 pound-feet of torque, it delivers stellar performance.Yet, it's perfectly capable of idling around town.The clutch is light, the shifter feels just about perfect, the seats are comfortable and, the CTS-V can mosey down to the grocery store just fine.It's fairly quiet underway, and the ride is not harsh.

On the road, we found the CTS-V idled smoothly and quietly but responded to throttle inputs unlike any other Cadillac.Big torque, big power, right now.The huge tires didn't make very much road noise, but they did provide the kind of cornering we're not used to in a fully equipped, 4300-pound luxury sedan.In combination with those instant-acting shock absorbers and the big tires, the CTS-V felt like a German-style sports sedan, with quick steering and deft handling on the country roads, a smooth ride, and massively powerful brakes.

On the track, we found the CTS-V to be a rocket, fast and predictable.We were quickly able to drive it very hard while still well within our driving abilities.It is a car that inspires confidence.The CTS-V is a superb car, capable of running against the best sedans from Germany and Japan.

NewCarTestDrive.com correspondent Jim McCraw test drove the CTS in Northern California and the CTS-V near White Plains, New York; with Mitch McCullough reporting on the CTS-V from Infineon Raceway at Sonoma, California.