I actually have both a G10 and a S100. Even though they do overlap in what they can do, the S100 is the perfect travel camera, as it fits in a pocket. I often use the G10 coupled with a 420EX for parties, events, that sort of thing. It's smallish that way and still delivers amazing results.
I wouldn't mind the G1X but at that price, as others have said, I'm more tempted to get myself a new L lens. Now if the aperture was constant or close to constant, let's say f3.5 at the long end, then it might be usable for portraits with a nice amount of blur, but at f5.6 I am afraid it may look more like a point and shoot again which sort of defeats the purpose of the large sensor and money spent. I do look forward to some in depth reviews and sample shots though, maybe they will change my mind.
I agree - in order to get a portrait with any sort of background blur, you will need a lot of distance between your subject and the background. Unfortunately, to give a larger aperature, Canon would have needed more glass, and the camera would have been even less "pocketable". - After all, every camera/lens is a compromise - whether that is on size, cost, weight, aperture, sharpness etc. - It is very difficult to have it all.
When I upgraded my G5 to a G11, it was an absolute no-brainer that the G11 was worth getting. With the G1X, the answer is not as clear. Some of the sample images I have seen seem to show a lot of softness at the edges, which is a concern.
Half of me is wondering whether I should wait until next year for the "G2X" - that is assuming the update cycle is annual...
I have no doubt that the G1X is a big step in a new direction, but given the cameras I already have, I am wondering whether it is worth it.