I have had a bunch of digital camera, the one I have been using for the past year is a Canon Powershot SD850IS. It's the best of the bunch. it's only an 8mp but it takes amazing pictures. I think I might upgrade to the new 14mp model next month. I like to print larger images.
Canon Powershoot G9. Expensive, but worth every penny. Great zoom and excellent pictures. The new G10 zoom is not as good as G9
Thermoffats.... Have you got a G9 Powershot?? If you have, I'd be interested to hear more about it. Not sure the Moderators would like it too open though, as it might be classed as Spam - so just PM me. Thanks.
There are still major differences between DLSR's and Point&Shoot cameras. Mainly the fact that there is unbias focus control, completely manual aperture, shutter speed, and iso, as well as the ability to use a variety of lens types and various attachments.
For travelling, a dslr may not be the way to go. I am personally bringing a Nikon D40X with me while I go around the world for a year. It's a small compact dslr with amazing capabilities.
If you want a pocket (point&shoot) camera then check out the Nikon coolpix or Canon cybershot (elph) series. The best way to figure out which camera out of those two to pick would be to go to your local camera shop and try out a few that are in your price range.
Things to look out for:
-Independant control of Aperature and Exposure
-White Balance control
-Anything over 6mp at least
-Long lasting battery life! (suuuuuppppeeerrr important)
-Clarity and size of display screen
Good luck and make sure to take pictures with the camera at the camera shop to compare the different cameras.
Themoffats-- Agreed I have had my G9 for about a year and it is a perfect camera for traveling, it small enough to fit in your pocket and the photo quality is amazing
Both the Canon Powershot SD750 and SD880 are great cameras. I personally prefer the 880 though, quality pictures, good lenses, etc, but seeing as the 750 was released longer ago it may be cheaper.
I also have the Canon Powershot S5 IS. It's probably much bigger than you're looking for though It looks like a DSLR camera but it's not. It is in the mega zoom point-and-shoot category. It takes fantastic pictures without the hassle of carrying interchangeable lenses around. It's not a fit-in-your-pocket type camera but it's more convenient than an SLR I think.
I bought my first digital, a Nikon Coolpix p50, and I LOVE it! It has lots of controls if you want them, a good, wide zoom and 8.1 megapixels. Also takes video and panoramic. I carry it in my purse every day.
8.1 mpix in my purse.... Bliss.
I like having both a DSLR and a point-and-shoot, but carrying around the DSLR is a huge hassle, I have yet to really figure out how to really use the manual functions to its abilities, and isn't even close to being small! So, no need to go into that.
I personally use a Canon Powershot SD850IS, and prior to this one, I had 2 earlier versions. It's very easy to use, tiny, and mine has been through a lot, haha. My last one was in my purse when I spilled an entire bottle of water in it, and my camera somehow lived through it! I also dropped it a couple of times and got a few cracks but it didn't affect the quality of the images. There's the Powershot D10 that is waterproof and shockproof (up to 4 feet), but it's relatively new so I'm waiting on more reviews.
On the other hand, if you're going to be taking images in low light, I've heard good things about Fuji Finepix F100fd.
I recently skimmed a review for the Canon Powershot SD990IS that's supposed to be good for low light too, but I haven't tried it or heard anything about it first hand.
You might want to check out this page too: http://www.bestinclass.com/digital-cameras
The SD990IS is an OK camera, but very expensive for what it offers. It's around the 14mpix mark, what that offers is anyone's guess - unless you've got superhuman eyesight - and it costs about €350. There are just as good cameras for a lot less. Nice bitta kit though.