After conducting a second round of research and deciding that I really wanted an ultracompact (so some of the cheaper, chunkier, but feature-equivalent compacts dropped out of the running) I narrowed my list of digital cameras choices down to these three:

1. Panasonic Lumix DMC-FS3

Priced at $270, this camera has an 8.1MP 3x zoom lens, records 30fps VGA video (and also 848x480 widescreen video) in QuickTime, and has optical image stabilization, face detection, audio photo tagging, and an AV-out port. [CNET review]

I liked everything about this camera except that it records video in QuickTime, which is not a native Windows video format. This is an issue because my resource-strapped Windows XP laptop doesn't handle QuickTime very well. So, in order to edit videos recorded from this camera, I would first have to convert them to AVI (the native Windows video format) and all that would do is add is an extra step to the process.

2. Pentax Optio M50

Priced at $270, this has an 8MP 5x zoom lens, records 30fps VGA video in AVI, and has digital image stabilization, face detection, smile detection, and an AV-out port.

Though this camera lacks optical image stabilization, I almost liked it more than the Panasonic because it records video in AVI and the 5x optical zoom and smile detection feature are nice bonuses. However I wasn't able to find a good review of it online so I was a little unsure about getting it.

3. Canon IXUS 80IS

Priced at $320, this has an 8MP 3x zoom lens, records 30fps VGA video in AVI, and has optical image stabilization, face detection, face tracking, automatic red-eye correction, audio photo tagging, a speaker, and an AV-out port. [CNET review (with video), CNET Australia review, detailed Photography Blog review, technical Photo Review Australia review]

This was the most feature-rich camera of the lot and was also my favourite. However, it cost an extra $50 and that was an issue.

The Decision: Go for the Best

Fortunately, Nadia convinced me to go for the best -- this camera is her birthday present to me, after all (thanks a billion!) -- and convincing me turned out to be pretty easy so, as of yesterday evening, I own a Canon IXUS 80IS camera!

It looks like this and is about the size of a pack of playing cards:

[Source: Canon website]

I've been playing around with it since I got it and it's really quite fantastic.

Also, the extra $50 cost turned out to be a non-issue because Canon is running a promotion that gives your four free movie tickets (priced at about $15 each) if you get the IXUS 80IS. Yaay!

Accessories & Warranty

Naturally, the first thing I did after buying the camera was to get some accessories for it.

I got three freebies from Ted's Camera Store (which is a great store, by the way):

• a 2GB Lexar SDHC memory card
• a Transcend USB memory card reader (for the computer)
• a Ted's-branded memory card storage hard case

I then bought three more:

• a 2GB SanDisk high speed SDHC memory card (which can handle the recording of higher quality video)
• a Joby Gorillapod Original, which is a small, flexible tripod
• a Lowepro camera pouch

Finally, I bought a 3-year extended warranty from Ted's.

What Next?

Like I said, I've been playing with the camera since I got it (well, since its battery got fully charged) and it's a lot of fun. Its features are awesome and easy to use and I am now preparing for my first video blog post :) I'll post some photos and at least one video from it over the next few days.

Thanks, once again, to Nadia for this moste awesomest birthday present. 'Tis wonderful, indeed :)