Well, there are so many large sensor cameras. The Lumix GF-1, Epson EP-2 and now the new Sony NEX-3 and -5 and the Samsung NX-10 with Nikon and Canon rumored to be coming out with theirs. The net is that if you can hold off, I wouldn’t buy one of these things. There is so much changing. The GF-1 has the right form factor, but the JPEG processing isn’t so good, so you need to love RAW. The Epson focuses slowly.
The above are 4/3 sensors, but the latest ones use an even larger APS-sized sensor. The Sony is a marvel of technology with basically impossible to use menus. The Samsung NX-10 actually is the best of the bunch so far with good low light performance to ISO 800, good color quality and the all important EVF for sunny days. The main issue is that it is from a relatively new vendor of cameras, doesn’t have a shipping 20mm, and it is relatively large and doesn’t have many lenses. See the NEX-5 vs. NX-10 shootout
So net, net, if you can wait for Canon or Nikon to ship their APS-sized compact cameras and for Sony to fix their menus for advanced amateurs.
For truly compact cameras that have those tiny sensors, the main issue is that they have slow lenses and are noisy because their sensors are small and they are pretty much commodities except for being waterproof and having nice colors. However, Canon has introduced to innovations with their Canon SD4000 IS which has a backlit sensor which is supposed to be less noisy and an F/2 lense which is very fast. At $350 its a little more expensive but better image quality. The Nikon P100 has a backlit sensor too but is really big and more like a superzoom. And it comes in five colors!
DCResource has a good buyers guide and they like the Panasonic Lumix DMC-ZS7 is nice, but image quality is average although it has a 12x zoom.
Waterproof cameras are relatively few but the canon d10 seems to be the standout