I used to have a Canon Rebel XTI DSLR (still have it actually, just don't use it that much anymore). I love the camera but it is seriously huge. DSLRs take fantastic pictures but they also monopolize all of your diaper bag space.
Because of that, I wanted to get something smaller. I thought I was going to end up with a point and shoot but I wasn't thrilled with the serious downgrade in picture quality and zoom capability. Side note, don't even bother paying attention to the Digital Zoom numbers, digital zoom sucks and the pictures turn out like crap. You want to get the best Optical Zoom you can afford. I ended up getting a
Sony Cybershot DSC-H20 and it is fabulous. The picture quality is on par with my Canon DSLR AND it has a built in HD video camera which actually takes some pretty great videos. We have only ever owned Canons and I told Lee that's all I wanted to buy this time around but this little camera absolutely blew me away. The size is perfect and I take it everywhere, plus it has the video camera so I'm only carrying one device and can easily switch between the two.
Pics:
I was going to post a video for you but my Photobucket is being really stupid. I'll try and update you with one later.