I meant the best digital non-DSLR camera, as digital was implicit in the question. I saw Joe McNally's humongous life-size polaroids of WTC first responders, and Avedon's "In the American West" shot with a view camera. There is no way a small-sensor or small-format camera can produce images of that resolution and power. Then again, those cameras can't exactly capture the decisive moment either...
I guess I will have to revise my answer - the best digital non-DSLR in terms of absolute image quality is a 4x5 view camera with a Better Light scanning back.
As for the S3 IS, it makes the exact same crippling compromise an Elph does, using a tiny, noisy sensor. At least on the Elph that compromise buys you something, low cost and pocketability. The S3 IS is neither. Considering DSLRs like the Olympus E-410 are now available for about $450 including lens, there is no reason to spend more than $200 or so on a small-sensor digicam.