You can't go wrong with any of the good brands. I took a Canon Ixus50 (5 Mecapix) to Europe last year with excellent results. I think the current model is an Ixus 100 (10 Megapix). Just remember that Megapixels is not the only thing to go by - the quality of the lens is just as important.
I've just bought the new Olympus F-230. It's just superb. Smaller than the F-130 (which I also have), a lovely looking little gem, over 7mpix, excellent pictures and just £120 (approx €140, $170).
I haven´t read all the responses so I may be saying something many have already said aswell, but I really recommend the Canon G-series. I have a G9 and I think the G10 is out now in most places, though I don´t know the differences.
It makes great pics, often just as good as a DSLR, in my opinion and many professional photographers use it as a subtitute for their DSLR, when they are somewhere where a big camera isn´t handy. The LCD screen is very clear and it has the option to shoot in RAW-format. It also has the possibility to add certain lenses, which I haven´t tried myself, so I don´t know how that works and what it does for the quality of the pics.
You should check it out, it is a very good option.
There are some very mixed reviews on the G-9 from pro's in monthly photo publications. Some are very much for it - and others quite against. Guess it's gotta be all down to personal taste.