I've been struggling with this same question for awhile - I have a S1 with a underwater case and the 1.6x lens. I use 4GB cards in it and have been using it for pic + video since the S1 was released. It was (and is) great in replacing my digicam + videocam for vacations, events, etc.
However, I've been yearning towards something small for amusement parks, etc for awhile.
I think I'm going to dump the underwater case for the S1, but keep it and the tele lens for kids sports, plays, etc where I'd be shooting from a distance. For vacation/etc use I'm going to pic up one of the smaller canons - maybe a s450 (I have to compare features still) + an underwater case.
So yeah - keep both
