I'm surprised no one (to my knowledge) has linked to this Ars Technica
article on the supposed end of the megapixel war. Some people obviously need more, but I think the larger point is that those people comprise a smaller and smaller part of the overall camera-buying population. I've seen the various articles about how the iPhone is now the most used "camera" on Flickr, Facebook, and so forth.
I have a 3GS that I used to take the picture that appears in this links post
simply because I happened to have the camera on me. Sure, I usually have a Canon SD 800 in my pocket most of the time, and a gifted Rebel XTi that comes out for occasions and sometimes for dirty pictures, but for a lot of purposes any of the three is "good enough" in terms of megapixel count.
I'd rather have the dynamic range, aperture, and so forth, than more megapixels. That's not to say I'd gratuitously turn down more, but, say, 10 as opposed to 15 megapixels doesn't bother me. If you said, "You can have pretty much any camera you want today," I'd probably choose an s95 because it's easy to carry and I'm likely to have it with me.