I think this camera fits the bill. I really love the SD series and this is one of the more affordable models in the lineup. If you can spring for an extra $70 or $100, I'd look at the SD700 and SD800 respectively. Those models give you image stabilization which is great for the times when you really can't steady the camera or in lower light conditions.

I have the slighter older cannon SD 600 and love it. It's small enough to carry in my purse and takes great pics. The 600 is only 6 MP but the quality is great for normal size photos. It's great quality up to 8x10 prints.