See an examination of the photo quality from Canon's pocket camera designed for advanced amateurs, the PowerShot S90.
The S90's photo quality is impressive for a compact camera. However, like most of Canon's PowerShot line, ISO 400 is about the limit before you start seeing softening of fine detail. On the other hand, noise is minimal and the suppression isn't heavy to the point of destroying all detail until ISO 3,200. The S90 lives up to Canon's improved low-light performance claims. Colors are also consistent through to ISO 1,600, so usable photos at small print sizes are possible.
Taken handheld at ISO 800 at dusk (1/25 at f/2). Though her eyelashes are fuzzy, detail is still plenty good enough to get a good print at 8x10 or smaller. And other than a slight graininess to the background, there's no noise to speak of.
There's a small amount of barrel distortion at the camera's widest 28mm-equivalent position (top). The zoom is short on this camera--3.8x--so I didn't expect to find any pincushion distortion and there wasn't any (bottom).
What I did see was chromatic aberration. It was a below average amount in situations like the one pictured where you expect to see it. It's noticeable in prints of 8x10 inches or larger (especially if you're sensitive to it).