I got my current digital camera (an Olympus 490Z) about two years ago. I bought it from Amazon.com with gift certificates I earned listening to an online radio station named echo.com. They're sadly out of business now, but back then they gave listeners points for listening, and they also gave referral points when people you got to sign up listened. They also had pretty cool functionality. Each user could create their own station by describing which types of music they liked to listen to and rating individual artists. They also had chat functionality built in so you could talk to other people who joined in listening to your station. Unfortunately their business plan didn't really work out so well, so when the dotcom bubble burst they tried a few things to stay around but they just couldn't make it.
Anyway, I'm thinking about replacing my old 2MP camera with a 4MP model with more manual settings. I'm considering the S40, G2 or G3.
The S40 is much more compact than the other two, but it also lacks some of the additional features like a remote control and room for an external flash. The G3 is replacing the G2 so it has a lot of minor improvements in functionality and a better zoom lens, but the G2 is cheaper as retailers are clearing them out to make room for the new model. There's a new S45 that will replace the S40 but it hasn't been announced in the US yet.
The G3 is definitely the coolest of the three with the most fun features. I think the S40 might be more useful to me though thanks to its (relatively) small size. One of my main uses of my current camera has been taking pictures of events (parties, reunions, weddings, etc.) and I think the size of the S40 would help for those types of things. It also has most of the manual settings that the G2 and G3 have. The G3 can do time-lapse pictures which might be interesting for taking pictures of sunrise on LeConte or something. I could just go with the S40 for now (it's substantially cheaper than the other two) and play with the new manual options for a while. If I decide I need something better later I can consider the G3 (or its successor.)
(I know that film cameras are much cheaper up-front and the resolution of 35mm is much higher than 4MP, but I prefer digital since I don't have to pay for film or prints or anything. I just buy the camera and memory and I can take as many pictures as I want. Hundreds of pictures can be archived on a CD that costs less than a dollar.)