There's been some discussion in the forums about whether "more megapixels are better" in compact consumer digital cameras. There's a new site that explains why more megapixels actually make images worse, unless you're using a digital SLR or one of the very few compact cameras with a large sensor:

http://6mpixel.org/en/

Unfortunately, there are not a whole lot of compact cameras on the market anymore with just 6 megapixel resolution. Some of the Canon Powershot models (including the excellent S3 IS) have 6 megapixels. One can only hope that camera manufacturers will either increase the size of their sensors or else offer lower-resolution models (which seems unlikely).

Dont forget that you might display a low resolution photo on a higher resolution monitor.

I remember when HD TV just came out and my dad got one of those. When he played VHS tape, the quality was bad; it is worth than his SD TV. When he played DVD, the quality was super. I guess that has something to do with the monitor.

I think people need to stop looking at megapixels as a quantifiable measure of a camera's quality. Just like when printers were the cutting edge you had companies fudging to report a higher DPI number, now they're using chips with higher pixel count and lower quality pixels. If you have good pixels, then yes more is better. I've taken some pictures with my D80 that look awesome at 1:1 on my monitor. But for cheaper cameras, people would be better off reading a review rather than just going by the pixel count. All 10 megapixel cameras are not created equal.