Digital cameras: Ultracompact Cameras

I just did the same seach...Panasonic DMC-FX9

I went with the Panasonic DMC-FX9 (LUMIX series in black) and only payed $300 through Butterflyphoto.com. I wanted something I could put in a jeans pocket for going out and for extensive travel but still delivers simplicity and excellent photo quality. It's 6 MP and has a Leica lens, plus nearly unheard-of image stabilization. It packs about as much as you can into its small size. The image stabilization is worth so much more, too- it's like having a much higher-end camera and with small cameras being prone to jitters it
s especially helpful. And it is really small. The case is metal on the sides and plastic on the front. Panasonic has an excellent repair history and puts out some awesome cameras that get overlooked.

CNET didn't seem to think as much of this camera as the Casio z750 and the new Powershot 450, but I read reviews at dcresource.com and dpreview.com that convinced me it is as good or better now that Panasonic addressed some battery issues and a couple other things in previosu versions. Frankly I think CNET punted on this particular review. They scored the fx7 at 7.2 but this one at 7.0 even though Panasonic apparently addressed the problems inherent to the already recommended (Editor's Choice for ultracompacts) fx7.

I found these other reviews helpful:
http://www.dpreview.com/reviews/specs/Panasonic/panasonic_dmcfx9.asp
http://www.dcresource.com/reviews/panasonic/dmc_fx9-review/index.shtml