The two cameras are not really alike other than in size.
The S95 is an advanced compact. It offers a larger aperture lens, a larger imaging sensor, fewer pixels on the sensor, and is designed with manual control and better image quality in mind. Those things are why the camera does much better in low light.
The TZ10 is what many call a travel zoom camera. As you discovered, it does not do as well in low light, because it has a smaller aperture lens, a smaller imaging sensor, and more pixels...exactly the opposite of the S95. But it does have that useful range of focal lengths.
You might want to look at the Canon G12 or Nikon P7000. Those have the larger sensor and almost as bright a lens as the S95, coupled with more zoom range (but still not as much as the TZ10. Another possible downside is that both the G12 and P7000 are large and not pocketable except for a coat pocket.
Or something else entirely? I'm looking for a compact digital camera with great quality images, ease of use, low light ability and video would be great too. It would mainly be used for shots of my children and family, parties, holidays etc.
I (think) I've narrowed it down to the S95 and TZ10 but can't decide which. The S95 seemed to have a better image quality (just) and very easy to use and worked well in low light but the zoom wasn't as good. The TZ10 on the other hand had a great zoom feature but didn't seem to work as well in low light. I think the low light would be a real issue as I often take photos of my kids indoors.
Which would be the best option or is there another camera I am overlooking that would be just as good? Also, seems I can buy one for half the price online - is that a good or bad idea? Thanks!