Thanks for this info. I read customer reviews that said the IQ was on a par with entry level DSLRs, but I was skeptical, and your saying that the sensors on those are 7x larger would seem to confirm that! It's a big camera (29 oz, I think), so it's actually heavier than a lot of DSLRs. Haven't seen one yet. I like the manual zoom concept. I was thinking maybe to get something like the Panasonic FZ35 (I guess it's at the top of my list right now), and look around for a used entry level DSLR later so I can get some real idea of what a DSLR has to offer. I know that a lot of times a DSLR, bag, etc. will be a lot of stuff to lug around and I'll want a P&S, but right now I have no real concept of why a DSLR is better. I need to find out for myself.
Funny thing is I was researching the S200EXR two nights ago online and saw it for $410 shipped at Amazon, but last night they made you put it in your cart to see the price and it was $495!
A DSLR can be a lot to carry around, but only if you want to carry a lot of stuff around. Right now, I carry my 40D with a battery grip, 2 lenses, and a flash, but if you want a versatile DSLR kit without carrying a ton of stuff, then you can always go for a lens like an 18-135mm or even 18-270mm, which are "jack of all trades" lenses. Carrying around an external flash isn't strictly necessary, nor are carrying other things like an off-camera cord. Those are things you may find useful as you learn more about photography, but if you just want to do some simple shooting just the camera and a lens or two are fine.
The beauty of a DSLR is that you can configure it to your needs before you head out. For example, if you're going to the zoo and want to take pictures of animals from a distance, you can put a 70-200mm or 55-250mm zoom on your camera. If you're going to be taking pictures in low light, a lens like the 50mm f/1.4 will let you get by without a flash even in very dark conditions.
Another good thing about DSLRs is that the image quality isn't drastically different between the cheapest $500 model and a $1000 or even $1500 model. Short of $2000+ full-frame cameras, most APS-C DSLRs (Canon XS, XSi, 50D, Nikon D40, D300, etc) have similar image quality and ISO noise levels. The more expensive cameras have fancier autofocus systems, magnesium bodies, etc, but the most important part of a camera-its sensor, is not hugely different between the cheapest DSLRs and midrange DSLRs.
As an example, the Nikon D5000 actually uses the same sensor as the Nikon D90 and D300, and the Canon T1i actually uses the same sensor as the EOS 50D.
Most entry level DSLR kits come with two lenses. For the Canon XS and XSi, they are the 18-55mm IS and 55-250mm IS. Neither of these lenses is particularly heavy, so carrying both around isn't much of an issue. Both have image stabilization for non-blurry pictures even at slow shutter speeds.
I don't think you should let the choices in lenses intimidate you. There may be hundreds to choose from, but you only really need two or three to cover most shooting needs. Carrying those around shouldn't be too bad.
With the prices of new DSLRs as low as they are now (well under $500 for a camera with a 1 lens kit, around $500 for a 2 lens kit!), you should definitely give them a serious look over the megazoom point and shoots.
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