I'd been waiting for the five megapixel version of the digital Elph, but when the first reviews of that camera came out, I was a little disappointed. It seems that Canon is having a bit of a problem cramming so many pixels on such a small sensor, resulting in noisy images.
What does this mean? It means that the four megapixel cameras are taking better looking photographs with smaller file sizes.
I decided to get the S45 over the S400 after a little research. The S400 will probably suit most users fine, but if you want to have manual control while still retaining a reasonable camera size, the S45 is great. The S45 also has the capability to shoot in RAW mode and the S400 does not. This allows you to store images in an uncompressed state, with all the data from the sensor intact. I wanted a camera that I could grow into, not a camera that I would completely master in an afternoon. Right now I'm using it in auto mode and experimenting with the many manual capabilities.
Downsides? While the camera is small, it doesn't fit comfortably in your pocket. If this is really important, buy the S400. After all, you won't get a shot if the camera isn't with you. I don't mind carrying a camera, so it's no big deal.
I bought this a few weeks ago when Amazon was closing them out at less than 300 bucks. They're gone, but still can be found elsewhere.