I've had five Canon digitals: the tough-as-nails S230, the reasonably robust s410 (though the rotary settings dial failed there, happily I had the AMEX extended warranty), the ultra-rugged G2 and the excellent Digital Rebel XT. Oh, and the brand new frail and feeble Canon PowerShot SD600.
Oh, it's not a terrible camera. It's inexpensive, the images aren't worse than the s410, the shutter lag is somewhat less ... but I expected more. Yes it's smaller -- but only outside of the case. Put it inside the somewhat bulky case (you wouldn't want this fragile toy any other way) and it's about the same size as the s410 in its case.
So the size drop doesn't bring much practical value, but the large display and small size have some unfortunate side-effects. The flash is microscopic and the battery is too tiny to power the big display for long. Speaking of the big display, it doesn't leave much room for the almost invisible controls. Yes, the display is nice for doing on camera image review and editing, but we do that on the 20" iMac display. It's made for consumers who don't use a computer.
Maybe it was the lack of space that made Canon remove the mechanical switch between 'Auto' and 'Manual' settings. That hurts. My wife uses auto, I use manual. The switch used to be foolproof, now it requires quirky menu navigation.
And so we come back to the build quality. On the one hand the camera has a one year warranty. On the other hand it probably doesn't cover the camera door coming off in your hands. This camera is 'Made in Japan', but evidently that doesn't mean what it once did. The first time I inserted the SD card it wouldn't pop out again, though it did on a second try.
The Digital Elph's had an enviable reputation for solid construction, Canon has tossed that out the window. If I were Canon's CEO I'd be calling for an internal inquiry.
A few positives to end with. It still uses a standard mini-B USB connector and Canon's compact and plugless wall charger is as well designed as ever. For the price it may still be a competitive offering, but in the past I used to tell friends to save their time and buy Canon. Now I have to tell them to look around first.