If you can afford it, go for the Canon G3 (or even the G5)
I was a bit naughty and blew a bit (I'll say!!) on a Canon EOS 10D digital SLR (6.3 megapixels). IMHO the dog's biscuits, especially as I have a 35mm EOS system and the lenses fit!
I do use a camera a lot. This week I have taken over 150 pictures and have been known to take 170+ in a day (Airshow, motorsport etc) The cost of the camera over savings on processing film during the year, will pay for at least half of the initial outlay! So to me it's worthwhile.
(oops! didn't read my own earlier post above...deja vu - almost!!)