May I suggest a Panasonic TZ1.

small and compact, with 10x zoom, 5 mega pixel (its all you really need), Image stabilizer, 2.5" high resolution screen.

Easy to use, quality made, and takes great pics.

If you can live without a viewfinder (lots of cameras are shunning this), and don't mind using a proprietary battery, then I highly suggest this camera.
{How about a link that doesn't stretch the page out?}

[This message has been edited by Trumpy (edited 12-11-2006).]