Hello Gofer: "Size is everything - smaller is better"
I agree that the portability of some of the smaller models is a big convenience, (I still have my Rollei 35 and Contax TVS), but one of the prices of "small" that should be considered is rather limited battery capacity. This can be an annoying limitation and the built in flash capability also becomes more limited by the battery power available.
Like so many of the features on these digital cameras it is one of the considerations that depend on what you want from the camera.
I must say though, that it is amazing the capability and features they have managed to squeez into some of the smaller cameras.