I'll join the chorus--the phone effectively kills the low-end P&S camera. While there still is a demand (people who don't want smart phones) I don't think it's enough to sustain the market. The phone only replaces the low end of the market, though. A good P&S is still well above what the phone can do.
Also, digital "zoom" is a joke--they're simply cropping off the outside of the picture and pretending they are still getting the same resolution. When I zoom my P&S all the way in the image really is 4x larger. Do that with a digital "zoom" and you just threw away more than 90% of the sensor data--you're talking a camera from the turn of the century. I would *NEVER* use a digital zoom unless it was a quick-and-dirty snap/send/view/delete situation. Otherwise I would take the shot without the digital zoom and crop it later.