I've been thinking about buying something nicer as well, I have a 3yr old Canon SD780IS P&S which I do use frequently for eBay photos and documenting projects, but not much else because even though it's quite compact, I don't carry it with me. Quick candid snaps on the go are taken with my iPhone. Carrying around an extra device is just not convenient, no matter what it's size.
Since even my little P&S only gets used for pre-planned shots where I have plenty of time to compose and experiment, I've been thinking - with size not a concern for what I use it for, why not replace it with something better? It obviously takes much better pics than an iPhone, but the vast majority of pics I take with my SD780IS are in its very rudimentary "manual" mode. I've found I really miss being able to play around with shutter speed and aperture like I used to in my 35mm SLR days.
Like a lot of people, I've become very accustomed to using LCD viewfinders and never use the optical despite my P&S camera having it. Mirrorless interchangeable lens cameras have caught my attention, since they can use the same optics and have the same sensor as a DSLR, but without the SLR mirror mechanism that I'd probably never use. The Canon EOS M is supposed to be like a T4i, sans SLR mirror mechanism, optical viewfinder, and built-in flash. Unfortunately, I find the lack of built-in flash to be rather inconvenient, but maybe it will show up in future generation cameras. On the other hand, it's a lot easier to find a deal on a T4i, and if it's possible to get a T4i cheaper, there's really no point in getting the EOS M.