I am very hapy with my Canon Powershot S400. The newer version is the S410, or if you want a 5 MP version, the S500. I think the 4 MP version is more than sufficient.

A friend of mine bought the Pentax OptioS4i. It is smaller than the Elph, but the reviews say the Elph takes better pictures. They both use proprietary digital batteries.

The things I would change about my camera-- I wish there was a remote for timer pictures (minor annoyance) and the camera gives very little warning that the battery is low (useful to have a spare).

All the above cameras have 3X optical zooms. If you want a very compact camera, it's hard to go much above that.

Check out www.dpreview.com or www.steves-digicams.com for more info, too. I have found them useful.