The Canon PowerShot S40 was a terrific small digital camera when it was introduced, but the digital camera market advances quickly and this model has been surpassed by Canon's own S45 (an updated S40) and the new S50 (5 megapixel in the same body only in high-tech black). Serious photographers seekng a digital would turn to Canon's EOS Digital Rebel. The S30 and S40 are good cameras if you want lots of features in a small package without paying a lot of money.
Features begin with the generous maximum 4 megapixel image size (you can make them smaller to conserve space on the CompactFlash card). Several modes are available to you such as Sports (high shutter-speed and high resolution shots), Portrait, Night, etc. You can put it in complete Idiot Mode (okay, Automatic mode) and let it select your shutter speed and aperture, or you can pick one or the other and let the camera pick the missing one, or you can go full into Manual mode and pick both. There's even a Movie mode, complete with sound. These video clips are 320 x 200 pixels.
This small camera fits in a purse or shirt pocket easily and won't get in the way if you're shouldering it in a case (not included, just buy a generic). But you pay a price for the small size: the optical zoom is limited to 3x. And unfortuately, the S40, like all the PowerShot S family, starts out with a focal length of 11mm, which is a very wide-angle view. Even at 3X optical zoom you will max out at 55mm, often not as close as you'd need. There is a digital zoom, but so what? Crop your picture in software later rather than play with that silly feature. I found 55mm insufficient for shooting across a large room. If you work closer in this won't be a problem, but it is not a good focal length for shooting children, who stop whatever adorable thing they're doing when they notice you framing that shot. (And see comment on slow shutter response, below.)
The sliding door that covers the lens (and turns on the camera) seems flimsy and can cause problems. My 3YO niece got ahold of my S40 and ripped the door off. I was able to reattach it but now it's a loose tooth, ready to fall off again. Even under warranty, my choice was to send it back to Canon for 12 weeks or live with it. I couldn't live without the camera, so I kept it, loose sliding door and all. I've just learned not to lend it to people who can't baby it; a good push and that door is off the camera again.
One of the S40's most frustrating limitations is a slow shutter response. I can't tell you how many shots I've missed using it; I frame it lovingly, I see the perfect moment, I shoot... but no score. The people have moved on, the sun has set, the universe suffers heat-death, and finally the shutter clicks. If you want a fast shutter then you must have a digital SLR, as almost all the compact-style digital cameras such as this one have the delayed shutter issue. Another note of annoyance on the PowerShot S family: they come with a wrist strap but no shoulder strap. I don't know what use a wrist strip is for a camera; if I'm not using it then I want my hands free. I bought a generic shoulder strap but it wasn't a great fit. At least Canon should offer one as an extra-cost accessory.
One difference between the S30 and S40 is the latter only allows an ISO of 400 which restricts low-light photography. This is a limitation of the larger CCD in the S40. ISO 800 shots on the S30 are quity noisy so it isn't clear you are missing this feature in the S40, and you gain an extra megapixel.
I still give this camera 4 stars for putting so many features in such a small package. The pictures are reasonably good, and at this size you can crop plenty out and still print good 4x6 inch images. The PowerShot S40 comes with software, but you'll probably want to buy your own image editing package, such as Photoshop Elements. The one provided is fairly limited. Useful software includes PhotoStitch, which allows you to make your own panaramic style images from a series of linked shots. The included 32 MB CompactFlash card is also too small for typical use, so plan on buying a bigger card. Also plan on buying a second battery.