After answering questions here for about 8 months, I finally decided to get a Canon Powershot SD900. After about one month of using the SD900, I am so happy with it that I bought one to give to my niece as an engagement present. I am that confident in the camera.
It's hard to keep up with the flourish of new cameras, but I think the SD900 is still the tops. It has 10 MP and it's the only SD that has the larger 1/1.8" sensor, which is nearly twice as big as the sensor in any of the other SD cameras. This generally translates into better image quality with lower noise. It's the one that I bought as my own personal pocket camera.
Here are a couple of reviews for the SD900:
http://www.dpreview.com/reviews/canonsd900/
http://www.steves-digicams.com/2006_reviews/sd900.html
http://web1.popphoto.com/cameras/3468/test-canon-powershot-sd900-digital-elph.html
Be sure to note that the reviews are many pages long so you don't stop after page one. Check the sample images, also. You can enlarge these to full size images if you click on the link below the picture. You will have to then put your cursor in the white space to the right of the picture and click once. After that, you can pass your cursor over the image and it will turn into a magnifier. Click it as a magnifier once and the image will go to full size and you can really examine the detail or look for artifacts like fringing or noise.
Here is one photo I put on-line that I took with the SD900. Click on "All Sizes" and view this as large as possible and check out the birds. (They are NOT digital noise!) Look at the tips of the branches of the trees to evaluate sharpness. This was taken right after sunset and there were no enhancements in afterprocessing. http://www.flickr.com/photos/7189769@N04/409551806/
Here's another photo with no post-processing at all. It was taken at the full 111 mm (equiv) zoom. It was taken in the fully automatic mode with no help from me at all. The horizon is crooked because the camera was resting on the top of my car. I did not want to alter anything, because this is part of a 3-image series comparing optical zoom with cropping to digital zoom. You can look at the other pictures while you are there and see why optical zoom is all that matters.
http://www.flickr.com/photos/7189769@N04/459603923/
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If you want to see some SD900 photos, go to http://www.flickr.com/photos/samfeinstein/tags/sd900 From there, you can also choose to "See all public photos tagged with SD900" if you want. Some of these are not so much beautiful photos as they are to illustrate a point for answers, but you can still look at the image to evaluate the quality. If they have been altered, I will mention that in the description.
B&H Photo has the SD900 for $325 right now. This is a good price. Many of us trust and recommend B&H Photo. I have been using them for many years without a single problem. B&H Photo is available through a link at Yahoo! Shopping, www.bhphoto.com or at 1-800-622-4987. See also http://www.resellerratings.com/store/B_H_Photo_Video_Pro_Audio
Beach Camera is another excellent company.
http://www.resellerratings.com/store/Beach_Camera_Beachtr
Canoga Camera 10.0 of 10.0
http://www.resellerratings.com/store/Canoga_Camera
ALWAYS check http://www.resellerratings.com/ before buying a camera on-line.
The only other ultra-compact Powershot I'd consider is the SD850-IS. You have to love the "IS," but you've also got to love the larger sensor in the SD900.