Canon introduced a bunch of new point and shoots today, including the new PowerShot G11, the successor to the PowerShot G10. The exciting thing is that they've apparently abandoned the race for more (useless, low-end) megapixels! Check out the specs of the Canon G7 (10 megapixels), Canon G9 (12 megapixels), the G10 (15 mexapixels) and now the G11 (back to 10 megapixels). The reason why this is important is because bigger pixels are better, cleaner, truer pixels, with less noise. (Especially in lower light. The noise really overwhelms the picture when the ISO gets cranked up.) As camera makers try to cram more and more pixels onto a sensor that's not any bigger, the pixels have to get smaller. Although technology does improve over time, manufacturers have been working harder at making pixels smaller than they have at making them better. The result was the PowerShot G10, which most photographers apparently thought has similar or worse image quality as the camera it replaced, due to the smaller pixels.
Of course, with higher pixels sizes comes larger filesizes. The more megapixels the more megabytes, which means cards fill up faster, transfers take longer, backups are larger, processing is slower, etc. Plus, noisier files compress worse! (ok - now I'm just splitting hairs...)
So now we've got the G11, with 10 megapixels. Most people who actually print their photos agree that 10 megapixels is a pretty good size. I've got a 48" wide print made from an 8 megapixel camera that's surprisingly sharp. This new camera seems to be Canon's way of saying they agree that 10 megapixels is enough, and working on giving us higher image quality instead of more pixels.
The next question is what this means for Canon's line of digital SLRs. Right now the two top cameras have full-frame sensors with 21 megapixels. The 1-Ds mk III is two years old now, and is bound to be replaced in the next month or two. Will they add yet more megapixels, or will they stop in the low 20's and work on lower noise and higher ISO?