I'm no expert, but I do know that the pixel count of a lot of compacts is greater than the ability of the lens to 'fill' those pixels - i.e the lens is not sharp enough to make the pixels worth having.
On a decent DSLR that's different though - I can certainly see a difference between my 40D and my Ixus at the same resolution. If I were you I'd invest in a few extra cards / storage if at all possible.
It would be a shame to get a really great shot and then wish you had used the higher setting ...
EOS 40D / Ixus 500 / S95, Canon 24-105 F4L, 50 F1.8, Canon EF 70-300 F4-5.6 IS, Canon 10-22 IS, Speedlite 430EX II, 580 EXII
My flickr http://www.flickr.com/photos/hairyfrog/