Finally I decided to spend some money beyond my basic necessities. After some push from my family I wanted to buy a camera.. Panasonic LumixDMCTZ-5.
Even though, the name, Panasonic, terrifies a bit, it comes with a Leica lens (if you have seen Euro Trip movie, will remember a Leica cam ;) ) and a neat 10x zoom. It is a little bulky for a P&S but works for my needs as still and video camera as I bought this along with 8 Gigs of memory. One more much applauded feature of this model is its sharp LCD, the best for a camera.
One more thing.. it comes with a wide angle lens (not common for a P&S) :)
PS: This model got best reviews so far in this range.