The size of the sensor in a digital camera is just as important, maybe more so, than the megapixel count

Sensor size determines the light-gathering power of the device and strongly influences the quality of the resulting images

Sensors in DSLRs are on the order of 1 inch across (except in Olympus E-1) or larger

Sensors in non-SLR type digital cameras (point and shoot and "prosumer" types) are much smaller, even in the new $1000 8-megapixel models

Because of the limited light-gathering power in the smaller sensors, ISO capability is severely limited

For an extensive discussion of this topic, see Ken Rockwell's article, The Two Classes of Digital Cameras

Snowy Egret