The only thing out there that would be smaller but not really better in quality is Pentax Optio S
That's the first digital camera I used. I borrowed it from my sister. I liked it a lot, but it was almost too small. The only thing that would stop me from buying one, however, is the price. Still a bit prohibitive.
The Digital Camera Resource Page recommends the
Nikon Coolpix 3100, but more highly recommends the
Canon PowerShot A70.
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