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The hot thing in photography these days is compact interchangeable-lens cameras, but the fact is they're still not that compact. If you want something that'll fit in a pocket, you probably want to stick to a nice premium point-and-shoot like this new 16-megapixel, Wi-Fi-equipped Olympus SH-2. While it doesn't have a big sensor or lots of manual controls, it does have a nice long zoom and solid image stabilization. The 24x zoom lens folds down almost completely into the body (though it does stick out quite a bit when extended), and that body is quite small to begin with.
There are stereo microphones for video, a built-in pop-up flash, and a 5-axis image stabilizer that's a relative of that found in Olympus's higher-end OM-D cameras. Don't expect to get quite the same results, of course — the SH-2 is much more a "luxury compact" for everyday use than a camera-lover's camera, but as long as you don't try to take pictures by candlelight, you should be all right.
If the SH-2 tickles your fancy, you'll be able to spring for it when it comes out in April for $400. (Be sure to get that cool leather case, too.)
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