If you want good shots outta a small digi, get a Canon Digital Elph. I've had three over the years and all of em' work great. Good Colors, decent features, and all smaller than a pack of smokes.
Right now though I am thinking about getting a Leica D-Lux 3. Supposed to have good glass and a decent processor.
Currently using an older Canon SD500, and a Canon Digital Rebel SLR. Both are decent. The Rebel gives you a whole lot more flexibilty and new and exciting ways to screw up your pictures.
Cannot go wrong with Canon or Nikon though.