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Originally Posted by Prof
I have a dSLR (Canon EOS 400D), which I love, but I've heard good things about Canon's high-end compact cameras. I'm not sure of the model names, but they're usually something like 'Digital Ixus XXX IS' or something like that. If you're in the US, replace 'Ixus' with 'Elph'.
Buying a dSLR will give you greatly improved image quality and more flexibility, but you can't just put one in your pocket and go out for the night...if you want a camera for holiday snaps, I'd get a compact.
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The Ixus range are very good quality for happy snap and even close to semi-pro quality. They have a good focal range and excellent colour reproduction.