First off, I'd like to say both camera's rock.
Excellent styling, quality, size, picture quality, features, everything.
I own a s110.
As much as I love the small size of the S110, I'd have to go with the S300.
The size of the S110 is small, but it's just a little to bulky and heavy to carry around in your pocket (it can be done, but it gets annoying).
If you were to carry it around in a bag, you might as well get the slightly larger s300.
And 2X zoom is definitely it's weakest point. It just doesn't zoom as far as I'd like.
I haven't personally used a 3X zoom camera, but I can imagine it being better than 2X.
If you can get a S300 for around $50 more than the S110, I'd definitely go for the 300.