As I said, I'd happily give up some resolution for image stabilization. I think 7 megapixels is the sweet spot as far as resolution goes. If you search around you might be able to find a Canon SD700 IS, the older model. People I know who own that camera have been very pleased. And I've enjoyed the point-and-shoot Panasonics I've used. But I don't think the image quality is as good as Canon's. Not that it's bad. Most people probably wouldn't know the difference. But I think it's hard to beat Canon when it comes to image quality.

One more camera you might want to look at is the new Canon PowerShot A570 IS. It's got image stabilization, it's a 7-megapixel camera, and it has more controls than the cameras you've been looking at. It's brand new so it's got Canon's latest processor, too. What you'll give up is size - it's not going to fit in your pocket. But it's a camera you can grow with, if you're interested in more manual controls. I just did a review of the 10-megapixel PowerShot A640 and was very impressed. Canon's A-Series digital cameras have been in our Top Ten lists for years because they offer such great features and quality for the money. I think any of them would be a good choice, although I would encourage you to get a camera with image stabilization, if at all possible. If you want to know more about why, we have a good article on image stabilization in our learn section.