I guess it depends on how much money you want to spend and how much you tinker around with your images in post.
If you are just a casual shooter then I would recommend the Canon Powershot SX150 IS. It's a great camera that i just purchased for my wife. 14MP & 12x optical zoom. (Don't get caught up in the digital zoom hype!)
If you are like me and like to edit your photos in Photoshop or Lightroom and want a small camera that will shoot RAW files then I would recommend the Canon Powershot S100. 12MP and 5x zoom.
It doesn't have near the zoom range as the SX150 but I tend to find myself shooting more wide angle shots then telephoto anyway so I don't miss the reach.
It's smaller then the SX150 and easily fits in a shirt pocket.
Another really GREAT feature of the S100 is that it has GPS tagging built-in. You can turn it on or off and also have it set to just tag the location in your photos or actually log your entire route.
The downside is that it's very expensive! $429.
Here's a link to a side-by-side comparison of the two.
http://www.dpreview.com/products/compare/side-by-side?products=canon_s100&products=canon_sx150is