Hey kodi, just my .02, but I would go with the H2. Imo, the extra $100 for the H5 is not good value for 1 extra megapixel and a larger LCD if the image quality is the same.
People probably buy Canon - whether there are problems or not - because of name recognition, and also I think Canon probably has the best top-to-bottom range of cameras you can get. I know several S2/S3 owners online and this is the very first I've heard of a memory card issue.
From the half-dozen or so professional reviews I've read, I believe the Sony H2/H5is as good - or better - than the Canon S3. I say this as a very happy Canon A620 owner and someone who does not like much of Sony's consumer electronics, which tend tobe way overrated (other than their top-of-the-line TV's) and overpriced. But hey, a good camera is a good camera, and I'd say you can't go wrong with either the H2 or H5. Happy shooting!