If you want better photos, then get an Olympus PEN for about $200 to $300. Don't waste your money on P&S or bridged cameras, including the Canon S100, because they do not produce significantly better images than a good smartphone such as iPhone 4 and the new Nokia 920.
Don't waste money on DSLR, they are too large and heavy, will end up eating dust in your garage. Furthermore, they all suffer from AF hunting when do video. Something like the Sony SLT-A35 is exceptional, because it is quite light and compact, with unique phase-detection AF for video. A35 can be found in Sears below $300 (the following photos are taken with the Stellar):
If you want to do both photos and video (who doesn't these days?), then get a Panasonic G, GF or GX. DSLR and other mirror-less cameras including Olympus PEN and Sony NEX, all suffer from auto-focus hunting problem. Furthermore, Panasonic G, GF, GX and GH are all hackable to produce broadcast grade video for very little money. This is an example from my hacked GF2:
Right now, the G3 is selling for only $299 at B&H, free shipping, brand new, 14-42mm kit lens included. If you are interested in good video in addition to DSLR grade photos, this is the golden opportunity.
PS: The Sony SLT-A35 is completely garbage compared to G3. So, G3 still stands as the only choice for the camera that does both 1st-grade photos and video, among all DSLR and mirro-less.
PPS: The Sony NEX-5R and NEX-6 feature phase-detection AF, but not available for video.