Just started using a Sony P150, and I've been impressed with it so far. It's 7.2MP and has a 3x optical zoom, and it's also very compact. I've taken a few dozen pictures so far, and it's done a good job even in low light. There's some noticeable noise in very low light (concert), but for the size, the picture quality is excellent.
Compared to the Sony DSC-W1 which I also have, it's the clear winner. It doesn't have a slew of options, but that can be an advantage -- no ability to fiddle with so many settings! I got my P150 for $200, but it was on clearance. Probably have to buy P200 now for around $300.