Excellent observations and keen insight, SG. Digital Cameras: Digital Photography Review, News, Reviews, Forums, FAQ is a great place to keep an eye on the various digital cameras that are on the market. Also, one can view older and expired models. One thing about the digital camera industry is that it is forever and quickly changing. My vocation was selling cameras from 1976 to 1982 after high school to save for college, and shooting weddings on the side with a Hasselblad 500CM (has been changed out for a 501CM, which I still have) in the 1990's certainly does not render me a "professional" but it is certainly great fun. The camera does not make the photographer as they say, and for me it is a hobby of collecting and enjoying. I still have a Minolta XE-7 that I purchased back in 1977, when we used to buy a camera like that and hang onto it for years. With the digital industry moving along so quickly, one can get the impression that cameras only last a couple of years and then because of new technology, a lot of advertising suggests to make a change and find a new one... the reason that I mention the Olympus E-1 above. To me it's still a little gem of a camera, an alternative to getting into DSLR with a small budget, and easy to use to boot.

With that noted, you mention that the camera does not have to be a DSLR... I have been looking at a point and shoot to take bicycling with my wife, in addition to my Nikon D200 that I otherwise usually use. There are a large number of point-and-shoots avaiable, and so I've whittled it down to three cameras in the approximate same price range. They are Nikon P7000, Canon G12, and Panasonic Lumix. These are fairly new on the market, and if one waits, it is likely the prices will drop. They are in the $500 to $600 range (USD).

Nikon P7000, 10.1 MP. I like this camera because it has a built in zoom ranging from 28mm to 200mm and the images seem to be great. It has a close-up setting, and I tried to take photos of one of my watches on the store counter one day... One advantage this has over the Canon is that in HD video mode, one can still use the Zoom. (I like the "rangefinder" type film-camera feel and Leica-type size).

Nikon Coolpix P7000 digital camera specifications: Digital Photography Review

The next on the list is a Canon Powershot G12. The zoom range is 28mm to 140mm, and the focal length is fixed in the HD video mode where it was set when the video selection was activated. However, it is in the 10 MP range AND the advantage of this camera is the extremely flexible viewing screen on the back of the camera. The personal (nothing to do with the camera) drawback for me is that I have already have a Nikon SB-800 flash unit that would be compatible with the Nikon P7000.

Canon PowerShot G12 digital camera specifications: Digital Photography Review

At the store, I was talking with a knowledgable and patient sales person, and he also brought out an alternative for me to consider, a Panasonic Lumix G2:

Panasonic Lumix DMC-G2 announced and previewed: Digital Photography Review

This is a 2/3's system and I was impressed with the small size and interchangable lens system. This is not a DSLR (a small video screen is what is seen in the viewfinder), but I liked the sample photographs and also the ability to have a close-up setting. In the store under florescent lights and hand-holding these cameras using the close-up setting with my elbows on the counter, and then only viewing the images on the screen, I seemed to like the image of my watch the best with this camera out of the three.

I agree with SG, however. It doens't have to be a DSLR. There are a good number of alernatives out there.