If it strikes you as odd, that the $1000 6 Megapixel Nikon D70s takes far better pictures than your average $400 8 Megapixel Zoom Crazy Point & Shoot, it is time to learn about sensor sizes and the nuances of CCDs and CMOS photo sensors. In this case, size matters. SLRs like the Nikon D70, Digital Rebel and above have 23.7mm X 15.5 mm and larger sensors; a regular camera (Sony!) has a 8.8 by 6.6mm sensor which  cannot capture all of what is called Dynamic Range.

The dirty little secret of digital camera sensors is that they  capture only monochromatic light intensity, and  due to some technical wizardary (hack!) of putting colored glasses, can they guess what color might be relevant for that pixel. This interpolation, it is pretty messy - really - the good news is that larger sensors(SLRs) do a far better job of capturing the light intensity and thus color accuracy.

The geeks in the audience can compare this to the dying art of comparing different CPU architectures, megapixels can be thoughts of as Mhz - catchy but useless after a point. It is not how many pixels you have that matters, but what they do. So rest assured, all those camera phones, which have even tinier sensors will always play catch up on picture quality - hopefully, it matters.