The conventional wisdom, every time this is asked, is either the G12 or the S95 (smaller than the G12). I have a G12, and it's a very fine p&s camera; I assume the S95 also is very good, and may be even better for her uses.
S100, or S95. My wife recently got the S95, and finally allowed me to convince her to set it to Program instead of Auto -- she's much happier with the pictures than any other P&S. Great little camera. Check that price on Amazon -- $229 for the S95 today.
I bought the S95 used here after askinng a similar question 3 weeks ago. Great camera, love the RAW. Flash is weak but that's to be expected. Great size, good build, excellent so far. The amazon deal for $229 today is sweet. I got mine used for $250, but with several cases so I'm still happy.
Robert, I considered the S95 as well, but ended up getting a Panasonic TS3. I too have a little boy (he's 2) and in the end the waterproof/shockproof design was more important than ultimate IQ.
I had thought about the elph 330. I thought the only big difference between it and the S95 was not as much manual control on the elph ? I assumed IQ would be close to same on both...? Both have the same size sensor and DIGIC4...I was looking for something cheap to leave in the car all the time. Just in case a photo opportunity popped up.