I'm not photographer or expert but here's my opinion. Like the
original poster, I wanted a camera that easily fit in my pocket. If
sub-compact size is at the top of your list of requirements I wouldn't
worry about choosing a camera that uses 'AA' batteries. The NiMh and
Lithium Ion batteries that many of today's cameras are using provide
plenty of juice for an entire day's usage, and are much smaller in
size. Currently you just can't get a big zoom lens with a sub-compact
camera. This pretty much rules out air-to-air shots with a sub-
compact camera; however, there still some good photos and video to be
had. One exception might be the Canon Powershot G7 with it's 6X
zoom. The G7 is larger than some but it's still small.

I just recently bought a Cannon Powershot SD1000 (mini elfe) and so
far I'm very happy with my choice. The square case is easy to grip.
The new DIGIC III image processor seems to do a great job and the ISO
capabilities of this camera allow it to do well without image
stabilization. This keeps the cost down. Choosing infinity focus is
easy and this camera still retains a view finder. I like that I can
easily fit it through the vent window and take pictures and video from
outside of the glider (I use the wrist strap, of course). It uses
standard SD memory cards which are pretty cheap now.

A good site for reviews is Steve's Digicams.

http://www.steves-digicams.com/hardware_reviews.html

For sub-compact cameras you can buy a micro-mesh sunglasses slip case
from any good sunglasses store that the camera will easily fit into.
This way dirt and other objects in your pocket won't scratch the
screen and case. You can wipe finger prints off of the screen using
the inside of the case and the case is washable.