I have the Canon S5 IS, and it's a wonderful camera. The SX30IS he mentions above is the latest of this line, and would be a nice upgrade from mine.
I have been looking to possibly replace my S5 with something smaller. I am not a serious photographer, and I frequently find myself wishing I had a camera but not wanting to lug around my S5 (which means I was wise not to get an SLR - even more hardware to lug around, despite the better results and flexibility.)
Here are some tips that may be helpful for someone interested in a really nice camera but not looking for a new obsession:
1. Standard batteries. After owning several of each type, getting a camera with a proprietary lithium-ion rechargeable battery is a deal killer. I use a set of AA rechargeables (Eneloop is the best around), with one set of backups. If I forget and end up without batteries, I can buy 4 AA's in a hurry and I'm back in business. Even with a smaller camera, I personally won't get it if it doesn't use standard batteries (AA, AAA, etc.)
2. Higher megapixels is NOT the way to compare cameras now. When digicams started out, and you were choosing between 1, 2, 3 megapixels, it was a huge issue. The difference between 8 and 12 megapixels for the casual photographer is completely irrelevant, and much less important than CCD sensor/camera quality.
3. I love a good OPTICAL zoom (ignore digital zoom, you shouldn't even use it). My S5 was one of the first digital cameras that would let you zoom in movie mode as well as still shots. This is a more common feature today, but one I wouldn't do without.
4. This is less of an issue today, but I avoid cameras that use obscure memory cards. When your camera uses a good old SD card, you have the best selection and price for higher storage. Memory sticks (Sony) add much more to the total cost of ownership because you're spending much more on the memory cards.
After owning Canon, Sony, HP, Casio, Panasonic, Kodak, I'm pretty firm on Canon as my favorite. The best two cameras (picture quality) I've owned for their generation were Canon and Sony, but Sony forced me to get both the proprietary rechargeable battery and the memory stick, so I haven't been back. (As I have been told, Sony has gone to SD cards in may of their current line).
This isn't meant to be a guide or a hardcore endorsement, just some things I have picked up and might be relevant to others in my situation.