From my experience with digital camera’s and I have used a bunch of them. I think the only reason I would every upgrade beyond what I have now is if my 35mm camera with changeable lenses ever breaks.
I still carry 2 cameras from time to time. When you need a Zoom lense the 35mm is the camera of choice my Digital just doesn’t get the job done in the Zoom department. But for in the house or at a party the digital is perfect. 95% of the pictures go into a digital scrapbook anyway and I don’t have the wall space for printed pics much bigger then 8×10. Ziff Davis examines the issue in a technical perspective. [ZDNet]
I couldn’t justify upgrading from my PowerShot G3 (4 mp) to the G5 (5 mp). Why no G4? Apparently certain asian cultures think 4 is unlucky.