Which Camera is Best for You?

Which Camera is Best for You?
Only you can decide, but there are a few questions to ask yourself that may help narrow down the choices.

Digital SLR's
If you are an avid photographer and don't mind the size and weight of a digital SLR, then the cheaper prices and superior image quality of these cameras make them a good option. But for people looking for an all-around camera, SLR's are probably too bulky. Believe it or not, most digital SLR's are MORE SIMPLE than their cheaper and smaller cousins, with less fanciful features and options.
Prosumer Cameras
Prosumer digital cameras are the darlings of both professional and enthusiast photographers. While they are more expensive than the average compact digital, (and even some entry SLR's) these cameras usually have three strong points.

Lens/resolution - Prosumer cameras generally have better lenses and image resolution than compacts. "Better lenses" being defined as combinations of optics quality, lens speed (max aperture), and wide angle/zoom.
Manual Control/Features - Probably the most important feature of a prosumer is that it offers full control over exposure settings including shutter/aperture, shooting modes, white balance, and film speed.
Ergonomics/Design - Prosumers are usually more sturdy, solid, and ergonomic than compacts. Many manufacturers use higher grade materials like thicker magnesium alloy frames for their prosumer cameras.

If you value full camera control or you want a camera you can "grow into", then I would strongly recommend a prosumer camera. They strike a great balance between features, quality, and size. Unfortunately some of these cameras reach prices of $1000 USD. Some, but not all. I would recommend paying attention to size and look for smaller models. There's no sense getting a prosumer that is almost the size of a digital SLR.
Compact Cameras
This category is far too general, and usually means "any consumer camera that isn't a digital SLR". Some models blur the line between compact and prosumer. A compact digital is simply a small camera that is easy to use. Price is no indicator, as prices range from $100 to $1000.
Compact cameras are small and easy to shoot, and there are hundreds of models available in every shape, size, and color. To be honest, if the goal is to take a good clean picture then you will be safe with almost choice.
As always, look for fast and/or wide lenses. A good lens will do more to transparently improve your photography than fancy video features and other gizmos.
Some compact cameras offer full shutter, aperture, and film speed control. If you want to learn more about exposure then any camera with these features is a decent alternative to the slightly larger and more expensive prosumer.

Love your camera.
Above all you should get the camera that you will USE. To use a camera you have to LIKE it, and you have to BRING it. A camera that gets left at home is not going to shoot good pictures. Size and price can be factors, so choose a camera that you will be comfortable carrying around in you bag.

But most important of all.. you should love your camera. If that means getting the cheapest deal, do it. Do you desire the compact with the fastest lens? Go for it. Got to have that new brushed aluminum compact because it goes with the rims on your car? Buy it.

Do some research, buy your camera, and shoot shoot shoot. 

from

http://www.photonhead.com/digitalcameras/cameratypes.php