Compact cameras are never the "top of the line" models - there is only so much you can cram into a tiny package.
Take a look at these compacts:
They all have pros and cons, but they all are relatively compact and should provide sufficient quality and features for your inteded use. Check out some reviews, not just on this site, but also on others. Look at some sample photos, taken by each of these cameras. Go to a store where you can pick them up and play with them...really good if you could see all three models next to each other so that you could compare.