Check out an examination of photo quality from Nikon's high-end touch-screen ultracompact, the Coolpix S70.
The photo quality from the S70 is good for a snapshot camera, but disappointing if you're going strictly by price. Below ISO 400 is where it's at its best, producing reasonably sharp photos with good fine detail. At ISO 800 and above there's noticeable color shifting, which is a shame since detail is still decent. While the S70 might look and act like a great nightlife ultracompact camera, the low-light photos you'd be apt to take probably wouldn't live up to your memories.
Chromatic aberration in high-contrast areas of photos was a fairly regular occurrence. Here, the tips of this flower are lit up like little blue-flamed candles. The blue/purple fringe is easily seen in prints of 8x10 inches or larger, but if you're viewing pictures at smaller sizes on a computer screen or printing at sizes below 8x10 you'll probably never notice.
Colors are not terribly accurate, but are nonetheless pleasing and reasonably natural. Exposure was generally OK, though clipped highlights were common, as they are with most point-and-shoot cameras. The white-balance presets worked well, however the autowhite balance leans toward warm.