I am selling my 40D and going back to my Xsi/450D. The 40D is a great camera but it is so heavy for me and I find due to its weight that I am just not getting it out and using it as much as I want to/should.
What I would like to do, because I am able to get some cash in my downgrade to the 450D is get a very good compact camera with great IQ.
Let me say that I would like to stay around $400. I will be shooting indoors and out and I have kids so something reasonably fast would be good.
I want something that I can keep in my bag/purse all the time so that I never miss anything (I don't need it to be super compact... my bags are pretty big). I will bring out my DSLR for more formal shots and special occasions. Most of my lenses are primes and are used for portraiture. I also would like something with decent video as I often like to do small clips of my kids.
I've read some reviews, but I'd love to hear opinions from people who have actually tried some and have opinions.

