If I had to pick up a new hiking camera right now, it would be this one:

The Panasonic Lumx DMC-LZ10.

Rationale:

1. Features. It has a moderate wide angle lens (30mm equivalent), and optical image stabilization. Both of these are very helpful in a small camera. It weighs less than 5 ounces.

2. Power. It uses 2 AA batteries. This provides several choices for the hiker: carry NiMH batteries and a charger, carry AA Lithium batteries (much lighter), or buy AA alkaline in any convenience store (expensive but works in an emergency.)

3. Cost. At $140, I'm not too worried if it gets trashed on the hike.

There are other similar cameras out there, though most use a proprietary lithium battery. I do like the Pentax waterproof cameras (we own 2), but the lack of image stabilization makes them less useful as trail cameras.