Hi Phil, welcome to the Cameralabs forums!
The compacts we've reviewed and can recommend can be found in our Best Buys section here:
http://www.cameralabs.com/buyers_guide/ ... mera.shtml
I'm personally a big fan of image stabilisation - optical or sensor shift that is, not high ISO as that just reduces quality - and I think there's benefits at all focal lengths, even at wide angle.
If you're taking photos at dawn or dusk, or even on a dim day, the shutter speeds can get quite slow at the lowest ISO settings required for the best quality. So long as your subject isn't moving, stabilisation can let you take the photo at low ISOs without shake.
You can also use it for special effects. Moving water, like a waterfall, can look great blurred with slower shutter speeds, but you'd normally need a tripod to keep the background steady. However stabilisation lets you shoot at slower shutter speeds to blur the water, but it'll make sure the rest is steady.
If I were buying a compact I'd definitely want stabilisation - and personally speaking, I'd also want 28mm wide angle coverage. The TZ3 is great in these respects, especially as it also has a 10x range and a nice big screen.
If it's physically not too chunky for you, it's one of the best around right now...