Speaking with regards to my older 1D MkIIn, I love pressing focus and knowing that it's in focus. A DSLR's focus system calculates the difference, and tells the lens "move as fast as you can to this focus distance". A P&S generally racks the lens (pushes it back and forth) and watches for the image to come into focus.
P&S cameras have made great strides in improving their contrast-based autofocus. One of the
new Fuji cameras has even sorted out a clever way of doing phase-based autofocus, just like a D-SLR, through clever masking of individual pixels in the standard sensor.
The DSLR has bigger pixels. Within a given generation, the DSLR's noise will be orders of magnitude lower than the mini-sensor P&S. This is often the difference between getting the shot and not getting the shot. I love cranking the ISO and doing available light with my cheap 50mm f1.8 lens. This produces images that are incomparable to images taken with an on camera flash.
For a given generation, this is very true. Across generations, it's quite interesting. My Panasonic LX3 (new in 2008) outperforms my old Nikon D70 (new in 2004), despite the latter having much larger pixels. Of course, the LX3 had fairly large pixels for a smallish sensor, while other P&S have significantly higher pixel densities. Likewise, the LX3 has a bright f/2.0 lens, versus standard kit zoom lenses on D-SLRs that often begin at f/3.5 or f/4.0. Two extra stops of light is nothing to sneeze at.
The larger sensor and dedicated lenses will always be able to have a narrower depth of field. This means that if I'm somewhere where the background detracts from a shot, I'll blur the background. I can also show the viewer of the image what to pay attention to, as the rest of it can easily blur away without even being apparent.
No argument. Large sensors require longer lenses for a given field of view. This is a feature if you like shallow depth of field. Otherwise, it's a whole lot of extra weight in larger lenses. Also, curiously, these P&S cameras do absolutely amazing macro photographs. I'm particularly intrigued by the
Pentax W90's inclusion of LEDs for macro illumination.
The interface is also designed for taking pictures. On my camera I can shoot a 6 hour event and never navigate a menu. I also can zoom to the point I want to zoom to in a fraction of a second. I can focus and recompose in that same fraction of a second.
UI quality varies significantly, but generally I agree that D-SLR cameras are engineered around the idea that you have some vague idea what you're doing. If you put the camera in one of the P/A/S/M modes, all the goofiness generally goes away. The higher-end P&S cameras have similar modes, in addition to the invariably stupid ones. ("Kids and Pets" mode? Uggh.)
However, all of these are nice to have, not required to take photographs. Every technique I use with my DSLR I can take and use with an old P&S, a tripod and a lightbulb. The images aren't as good, but they're certainly good enough to make a non pixel peeping audience happy.
I dearly loved my Panasonic LX3, prior to its being stolen. (A new LX5 should be arriving here in the next few weeks.) I also dearly love my Nikon D700. I see these serving very different purposes. The D700 is amazingly powerful, but it's also amazingly conspicuous and undeniably heavy. The LX3 is lightweight and versatile, perfect for tourism, and capable of remarkably sharp photographs.
When in doubt, own both...
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