Here are some camera ramblings. Do not feel compelled to read this.
If you want a point and shoot compact that takes images that look close to a DSLR and gives you manual control, I would check out these two:
http://goo.gl/9ZQi4m
The Canon s110 is pretty amazing, and is $150 less than the newest version:
http://goo.gl/N3tl97
If size isn't an issue, The Canon T3i is just a great camera, as would be any Nikon in the same price range of $400-ish:
http://goo.gl/h1OsBa
If you don't think you'll ever change lenses, DPReview loves this camera:
http://goo.gl/9KYFAj
I am shooting with a Panasonic Lumix GX1. I paid about $250 for the body with a 14mm lens. The lens is fixed, and wide angle. so it is great at landscapes and for walking in close for pictures. I really need to get something in the 45mm range so I have some versatility. The 14mm lens also fits in that cool case. There are always trade offs. The body feels totally solid, as do the controls, and it does all sorts of fancy stuff that I haven't figured out yet.
The GX1 is a "micro four thirds" camera, and weird style that sits between compacts and DSLRs. The thing is, it is still a little too big to fit in your pocket but you don't look like a National Geographic photographer when you want to take a picture of something at a Souk.
If you found a cheap GX1 body on Ebay and then got this lens, you'd have a really versatile, awesome, compact camera for about $350:
http://goo.gl/bs8XRQ
I guess the question remains as to whether it would produce significantly better results than a high-end point and shoot, or if it's just a case of the stats looking good on paper.
As far as everyday shooting goes, the Canon s110 is hard to beat for the price. And if you are happy with an iphone, they take great pictures in good light conditions and you always have it with you!
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