Definitely one of the Canon digital Elphs. I have the s200 ($299 at a retailer in the nearest city to me) and it has blown me away in terms of feature vs. price.
I was hesitant to spend over $300 on another camera to replace the crappy HP Photosmart camera I had, but the purchase is worth every penny.
Just go to
www.epinions.com to get the latest reviews by actual users as well as some of the current competitive prices.
Oh yeah, and I don't think you'll find a smaller camera with bigger features!