I agree with GenieDana. Speaking from experience, I would choose a slightly larger camera with a better lens and f-stop. I recently received a Minolta X50 5 mega-pixel compact camera (about the size of a pack of cigarettes). The camera is easy to carry and turns on in about 1.5 seconds and is ready to go.
My family went on a cruise back in February and I figured that the Minolta was up to the task, only to be somewhat disappointed at about half of our pictures. All of the out door pictures were great, but most of the indoor pictures were darker and not clear if the area we were taking pictures in was not extremely well lit. My cousin had his camera, an Olympus c-4040 4-meg, which is similar to the model I had left at home (Olympus C-3040 3 meg). The Olympus has a much better lens and flash range, so all of the photos that my cousin took in the same setting that I was taking pictures in were much clearer and in focus.
In short make sure you read a lot of reviews and really consider what you will be taking photos of. GenieDana has posted a lot of great links for research.
Good Luck,
Mike