It matters little how much equipment we use; it matters much that we be masters of all we do use. - Sam Abell

When I travel I do not buy souvenirs for myself. I buy them for friends and family. My souvenirs are the photographs, my memories in print. When I look at a picture that I took, I can feel what I felt the moment I captured the subject. I can feel the wind, see the light and remember things that I had forgotten. I am not a professional photographer, I just enjoy it immensely. I enjoy loading my pictures on to my computer, editing them with different software and uploading them to Flickr.
Before the days of digital photography, I had a very expensive SLR camera. I loved it. It took the best photos. I came in to the digital era kicking and screaming. I waited a LONG time before I bought a digital camera.
When I used an SLR, I had a backpack that held my camera, lenses, tripod and all of the equipment I may need to capture the moment. When I decided to switch to digital, I priced the DSLR's and immediately ruled them out due to the price factor. That actually ended up being a blessing. I now own an affordable Nikon Coolpix P90. What I love the most is the 24x optical zoom. That is the equivalent of a 600+ mm zoom. I do not have to change lenses.
The draw backs are that I can not add filters. My favorites were the polarizing filter and the UVB filter. I have not missed them too much because the photo 'darkroom' software is so good that I can edit my photos for the desired effect.
The camera does everything my old SLR did, manual controls, shutter priority, aperture priority, bracketing...everything I need. It is compact enough to fit into my travel purse but large enough to get the job done. It is not a lightweight model that you can fit in to your pocket, but I do not want that. I want to have high quality frame-able prints. The boat pic above was taken with my old Kodak z1015IS. I thought it took awesome photos but I wanted a higher zoom.
In my most recent trip to the Mideast, I used up an entire 8G sandisk memory card. Of course, I shoot at full 12 megapixels so I can blow up the photos for framing. If you do not want to blow up your photos, you can shoot at a lower MP and get more out of your memory.
Now, with all that said.....I have seen incredible prints from point and shoot cameras. Keep in mind, it is not the equipment, it is how you use it. If you are just starting out, I recommend getting your composition down. Really learn how to frame the subject. What angles are best?
Then get yourself some good software or photo service. Photoshop is great but it can be a bit intimidating for beginners. I like Picnik.com. I think I paid around $25.00 for one year. It works great with Flickr or Facebook and many other sites.
If you are serious about capturing the moments of your life......Get a free Flickr account and join some of the travel groups. It is a great way to share and learn a new hobby.
My house is filled with my photos. I have given them as gifts and made them in to cards. I have made photo books and shared my photos with my daughters geography class.
A picture is worth a thousand words?? Well, OK....for some. For me it is worth a whole lot more.