I purchased a Sony DSC S60 during November 2005. And I am happy to state that I am really satisfied with my nice companion even after 3 years. Though it is 4 MP, I didnt find much difference between a 7 MP and 4 MP image other than zooming into greater details. The greatest feature is its video capturing with extremely good audio. Even in full screen in a 17" monitor, sometimes I wonder if the video is from a handycam or my cute digicam. Sony service is also quite good.
Once I broke the 2.5" LCD. Although it costed me 4000/- to replace from Sony authorised service center, but I dont have any regret as its worth it. Memory price has reduced a lot. Recently I got a 2 GB stick from Sony world in Rs 1320 only. I purchased a canon charger and canon battery during original purchase. The battery lasted for 3 years!! and only recently I changed them.
For me, Sony is the best when it comes to Digital Cameras.