Canon IXUS 850 IS
I've been using our trusty Canon IXUS 400 for quite some time by now (some 20 000 pics), and I do wish I could upgrade. I'm probably going to have to wait though, but lets dream a bit in the mean time...
Digital Photography Review's look at the Canon IXUS 850 IS is a good read, like all of their reviews. It's sad that Canon has opted for such heavy noise reduction in this model though, but I guess thats what the average consumer wants. Compact cameras have their limits, after all, and cramming lots and lots of pixels into a tiny sensor will always be a noisy affair. Personally I'd like less megapixels at higher quality.
There's one area where compacts excel, though: They can be on you at all times. There's no point in an expensive Digital SLR if it's at home when the great "Kodak moment" comes along...