I have two cameras and which I take with me depends on what I am going to do.
I have my pride and joy EOS7d from Canon with a plethora of lenses, flashes, tripods knobs and whistles and buttons for all occasions. It is a fantastic rugged camera and I am able to take almost perfect pictures every time. Downside is, that it weighs a ton and with all the other kit, you don't really want to walk to far with it all. And at about 18 megapixies it is a bit hungry for space on my hard drives.
My second camera is a compact Panasonic Lumix DMC-FT3. It fits in my pocket, it has a good quality zoom lens without acting like a transformer when you turn it on. It is water and dust proof, drop proof and takes a bloody good picture in almost any condition with it 12 megapixies. I can take it out and about absolutely anywhere, including the beach, parties, mountains without really worrying about it. There are cheaper compact cameras out there but this one is a little gem in my opinion. I think it may have been superseded by now though so I hope its replacement is as good.

:o)

Cameras : Nikon D90, Canon G9 and an iPhone.

Tip : It doesn't matter what camera you use.

http://www.headheritage.co.uk/headtohead/tma/topic/28545/threaded/346777

Contemplating a bridge camera at the moment, been recommended Nikon Coolpix 510. Suffice it to say that I am a technical ignoramus as far as cameras are concerned, but WANT from my camera a good macro facility so that I can take fine photos of insects and wild flowers, without having to spend a lot of money on the more expensive variety.
Do agree with the general idea, that it is not the camera but the subject matter that is important and how creatively it is taken, some very fine examples on TMA of course. My old camera has a black dot in the r/h corner now which is so infuriating, although it can be cropped.
There is also the problem of the weight of larger cameras, LS says I am going to moan about this.....

If you are interested in starting out in digital photography my advice would be to buy a cheap secondhand DSLR and a good quality lens. DSLR's lose value pretty rapidly while lenses keep their value and usefulness for years and years. You can get a secondhand entry level DSLR made by a big brand name from about two to three years ago for very little.

While the type of camera used is pretty irrelevant when you see photos beside each other on a wall, I think having a camera with a bit weight and which is comfortable to hold with a nice big, bright viewfinder does make a difference, particularly when light gets low. Holding a lightweight camera away from your face so you can see the screen on the back is a recipe for blurry, grungy photos except in ideal daylight.

When all the functions are buried in menus you also won't get as much opportunity to take creative advantage of them, when they are just a button push away on the camera body you learn to use them to your advantage much quicker.