Hangler is correct in pointing to the Sony NEX if you're serious about quality pics from a smaller camera. But as he notes, this is not a cheap option.
Being in the Olympus camp, I'll migrate to their new so-called mirrorless cameras (which happen to have Sony sensors). They aren't cheap either, but you get what you pay for. See an independent review of the latest Olympus below.
The new small-is-beautiful cameras from Olympus, Sony and Panasonic are making inroads. As Hangler says, pros are adopting them. Canon and Nikon haven't responded in a meaningful way yet, other than offering their entry level DSLRs at super cheap prices. They've been caught flat footed—too happy to milk their dominant position with DSLRs.
I would not advise anyone to go into a shop and ask for advice on what to buy. Chances are the counter jumper knows very little and has been told what to sell you. Search the internet for reviews, and not just for cameras—read the lens reviews. It's relatively cheap for a DSLR manufacturer to load up a camera body with a truckload of whizzy features because many of these are software related. However, there is no cheap way to make a decent lens. So, for entry level DSLRs the manufacturers don't bother. They figure correctly that the average punter will be so mesmerised by the camera specs he won't realise the lens on the front end is just a jam jar. Later, the buyer may scratch his head, wondering why his mate's cellphone takes pics as good as his .
http://www.luminous-landscape.com/reviews/cameras/olympus_om_d_e_m5_review.shtml
Sorry, but I haven't caught any decent fish lately, so you'll have to settle for my latest human being pic.
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