Finally we have the update everyone had expected at PMA, the new PowerShot S5 IS. The S5 IS features an eight megapixel 1/2.5" (5.8 x 4.3 mm) CCD sensor and a twelve times Image Stabilized zoom lens. Unfortunately this lens, while offering long reach with its maximum 432 mm equiv. FOV doesn't improve at the wide end with the same 36 mm equiv. FOV as the S3 IS. Improvements include Face Detection (for AF, AE and Flash in shooting mode and red-eye removal in playback), a 2.5" LCD monitor (up on the S3 IS) and a flash hot-shoe.
For small-sized sensors, I'm not sure if DiGIC III is a real improvement over DiGIC II. Was doing research and deciding between G7 (DiGIC III) and A640 (DiGIC II) and several reviews seem to agree that DiGIII seems to have more aggressive noise reduction, meaning less noise at the expense of detail. The arguement was that at higher ISOs, the G7 produced cleaner pics but the A640 had more detail.
For such a small sensor, I'm somehow quite doubtful if higher ISOs will be of any use. But one things for sure, the inclusion of a hotshoe really opens up a lot more possibilities for night flash photography!