One of the interesting trends in digital photography is combining multiple images to overcome limitations of sensors and lenses. This is primarily a software trend, that seems to be gradually moving from desktop software to in-camera features. Of course, the desktop software isn't standing still either - the latest Photoshop has some amazing features, and special purpose software does even more.
One of the first uses of multiple shots was for simple panoramas. But people are also using this to get high resolution images from lower resolution cameras. For a while, cameras have had modes to help with this, showing you the previous shot while you line up the next one (and keeping the exposure the same). Now the new Sony HX1 has a "sweep" mode where you just hold down the shutter button and "wave" the camera. It decides what individual shots to take. Cool. (It also has a 20x zoom lens and shoots 1080p hi-definition video!)
Multi-shot techniques are also being used for high dynamic range (HDR), where you take multiple shots at different exposures and blend them together. (examples) You can do this with software like Photoshop, but it's also moving into cameras like the Ricoh CX1.
And multiple shots can be used to overcome limited depth of focus. (You can also go the other direction and simulate a smaller depth of focus.)
The Sony HX1 will even take multiple shots and keep the one where the person's eyes are open.
None of this would be practical without a variety of technological advances - faster image capture, bigger/cheaper memory, more processing power in camera and in computer.
These techniques are sometimes called "computational photography".
There are so many cameras out these days that it's impossible to keep track. A couple that have caught my eye lately are the Canon PowerShot SX200 IS which is a descendant of the S3 I have but much smaller and with 12 mp and 720p video. It looks perfect for travel. And the Olympus Stylus Tough-8000 which is waterproof (to 10m/33ft), shockproof, freezeproof, and crushproof. Can't beat that for adventure sports.
I used to shake my head at my father's collection of cameras, but if I'm not careful I'll end up with my own. The sad difference is that his film cameras stayed relevant a lot longer than any camera you'll buy today, which will be out of date before you get it home.