Ok, I have to say something for the future users reading this thread.
I just read the feature list for 450D and I think I might be getting one in a not-so-distant future. The only problem with Canon is that it lacks a decent super-zoom objective - like 18-200 VR for Nikon. Switching objectives for framing that perfect shot is a real turn-off for me. Essentialy to suplement my S2 (or an S5 for that matter) you have to carry an 18-55 AND a 55-200, both IS. Switching lenses means more dirt (even with that vibration thing), lost opportunities and a chance to ruin the camera (sand getting trapped into threads).
(VR==IS)
Nikon D40 is ok but old-generation - you can have a new (?) one with 18-55 kit for the price of an S5. D40x is better if you can afford one.
Canon 1000D is VERY ok, you get DSLR quality with a decent kit for about 100-200$ more than the S5. You still need an IS objective.
Sony Alpha A200 is almost ok, some ergonomics are debatable and you must get used to shooting RAW all the time since in-camera noise reduction is aggressive. Also you must need to know that lens mounts are incompatible with other manufacturers so you must stick with the lens kit they give you (18-70 + 75-300). Fortunately it has in-body optical stabilization so that's a few $$-$$$ to spare for each lens. Unless you're getting an unbeatable deal I would look at something else. As a plus it supports CF cards instead of the stupid (expensive) memory stick ones.
Two days ago I've played with the D300 with a Nikkor 18-200 VRII lens. My god, this is a CHDK user dream - you get to play with every conceivable setting a camera could have. For example it has customizable intervalometer, +-9EV bracketing, live view, d-lightning, huge LCD, highlight analysis, lens focus fine-tuning, 12- or 14- bit option for RAW files, HDMI, ... Some of these settings are also available on 450D.
Focus is FAST (like on most DSLRs) exposure is ok - though I found myself needing to dial back 2/3EV to get sharp shots even with active VR. Apart from that the VR system works great, up to 5 stops over handheld - I was able to get a clean picture from a bouncing vehicle at telephoto end.
Price is high (~1500$ for body), though I suspect it will lower by 300$ over the course of one year.
350D body is on par with S5IS (350-400$) as we're speaking. For starters you could buy a cheap Sigma lens.
Speaking of lenses and somewhat contradictory to my last statement - do not buy cheap lenses!

If you are looking for quality then invest 50-200$ more in a reputable brand. Look here:
The Best Canon EOS Lenses before buying and read reviews. There's no use in getting a >8MB camera and be able to use only a quarter of that because of bad optics.
Now, if you look at various reviews and site you will get to see a trend - people and physics favor fixed focus lenses over zoom ones. To add to that insult, good optical-stabilized lenses have another 300$ or more on top. I will explain this later.
The trend of optical stabilization has only begun 'recently'. Over the course of years photographers didn't use them, they just used fast (f1.8, f2.0) lenses, sometimes coupled with a tripod and other times coupled with high iso.
Let's look at
Tamron SP AF 17-50mm f2.8 XR Di-II LD Asph. IF Specifications and Review It has a fast f2.8 over its entire range, meaning it's two stops faster than S5IS (not really, different FL). But you get the picture.
Do not buy into the marketing people hype - more MP, higher ISO. It is only so much you could squeeze out of a tiny 1/2.5" sensor. See here:
Panasonic DMC-FZ50 Review: 17. Compared to...: Digital Photography Review . Not to mention FZ50's sensor is 1.4 times larger than most super-zooms.
G7 and G9 are usable up to ISO 400 but for quality you wouldn't want to go above ISO 200. S5 (S3 and S2) have even smaller sensor so you must strive to shoot only at ISO 100 (~80). IXUS/Elph and A460 series have even smaller sensors so it's only the lowest ISO for sharp images.
What this means is that you don't really need IS with a good DSLR - 450D shoots nice up to ISO 1600, that's 3 f-stops higher than G-series, 4 f-stops higher than S-series and 5 stops higher than A4xx series. Canon P&S IS seems to handle 3 f-stops.
DSLRs have longer life so you might be getting more life out of a second-hand one than a new P&S. Canon has global warranty, if that's of any help, and they replace manufacturing defects - keep a look out for announcements and class suits (like the purple LCD one).
All above was written with the thought that you are thinking of buying a DSLR to replace your P&S. Hopefully there is something to learn from it and my advice is to skip looking at a higher-range P&S (like G-series) and jump straight to DSLR. Here are some prices to help support your decision.
Remember though that the best camera is the one you have with you all the time (phone camera?).
DSLR kits have more value then bodies only - you save about 100$ per each lens included plus 100 for body:
Canon G9 ~400$ bundle - discontinued
Canon G7 ~350$ - discont
Canon S5 ~300$
Canon S3 ~280$
Quality wide-angle adapter for S-series ~150$
Quality tele adapter for S-series ~90$
A460 ~100$
A720IS ~250$
450D body ~630$
400D + 18-55 ~620$
350D body ~400$
30D body ~800$
D80 body ~720$
D70 body ~450$
D60 body ~550$
...