Canon PowerShot SD960 IS / Digital IXUS 110 IS

Stylish ultra compact with useful 28-112mm (equiv.) zoom range (4x), image stabilization and all the new toys common to the 2009 Ixus/Elph range (including 720p movie capture and Smart Auto) and a nice wide aspect ratio 2.8" screen. 12 megapixels is probably overkill for most users of this kind of camera, but Canon's Ixus/Elph range has an excellent track record for decent image quality and responsive, easy operation. The almost identical SD 970 IS (Ixus 990 IS) has a bigger (5x) zoom range but sacrifices the wide angle lens.