I was hauled into the back of a swat truck once in Uruguay because, unbeknownst to me, policemen were making a drug bust in the market I was photographing. I think they concluded I was working for some magazine or something because the camera I was using had one of those long telephoto lenses on the front. It was too high profile. My suggestion is – carry a camera that’s comfortable and practical for you, but beware of equipment that raises your profile unnecessarily. Last year, after carrying the Canon “G-series” for a decade, I switched to Nikon. The Nikon P-7700 was the sweet spot for me. High-def 1080 video WITH a mic jack into which we can plug a wired or a remote lavaliere mic (essential to bump up the audio quality for videos). It’s one of those unique cameras that has essentially all the settings of a digital SLR, without the look of one. In fact, it carries reasonably well in my jacket or vest pocket, completely out of sight. But the secret is to find something that works well for YOU. Pick up a little tripod to stick in your backpack or vest pocket. I still carry an external flash too (with the Nikon, I’ve gone to one of the Speedlite series) when I need to light up the entire room. I suggest you get one with a head that you can pivot upwards to “bounce” the flash off the ceiling so it illuminates generally, instead of only from a flat front view. The Nikon Speedlite series meters through the lense of the camera with a small test flash first, allowing for a perfect exposure every time. Outstanding units.
The best camera is the one you always have with you and know how to use. For most people that’s a cell phone with a camera in it. Mine is a Samsung Galaxy S3 that came for free with a business service plan that our organization has. It takes nice pictures —as do most new smartphones. I suspect that the iPhone 5s is probably best if you do a lot of indoor photography. Its sensor with large pixels, its super smart flash and its fast lens are a good combination for indoor photography.
However, I still take with me on my travels I’ve really appreciated the high quality, compact, interchangeable lens, mirrorless Olympus OM-D E-M5. The recently introduced OM-D E-M1 trumps it (of course). Great color, great glass, and excellent size/weight for travel. Next to the OM-D line, DSLRs seem ginormous. This is a very dynamic market.
I think that the next Big Thing that’s needed in cameras is the so-called “global shutter.”
Still love my Canon G12! Does everything my large, heavy Canon 50D will do with less weight and I can carry it in my pocket!
Shop for your needs. For many, a good smartphone camera will suffice for most needs. I have multiple DSLRs, a small mirrorless (MFT), and several point-and-shoot cameras. All have their place. Smartphones are great b/c you always have them with you, and they make sharing fast & easy. DSLRs became very popular but are now getting marginalized along with cheap point-and-shoots. The sweet spot for cameras now are mirrorless (DSLR-like features with changeable lenses, but much smaller) and high-end point-and-shoots ($300+). The mirrorless camera market is really beginning to mature, and there are many good options. For point-and-shoots, I like Sony, Panasonic, and Canon. If you have the money, arguably THE best option right now is Sony’s RX 100 M2 – tiny, endless features, articulating screen, excellent low-light images, amazing video, Wi-Fi and (I think) NFC for connecting to your smartphone. Unfortunately, it runs around $700 – $750. For a cheaper alternative, I really like my Panasonic Lumix LX7, which has an unbelievable f1.4 lens (unheard of in a point-and-shoot) that allows it to really shine in low-light situations. It can also shoot video at 60fps and 120fps, which allows you to create awesome slow-motion video. I think you can pick one up for under $300. A camera with good low-light capability is a huge plus and can help mitigate the need for a flash.
BTW, a couple of features to be looking out for as you shop. (1) Video. Video is increasingly important, and you’ll want something that handles it well. Look for something that shoots full HD (1080p) video as a base. HD video at 60fps (frames per second) – the standard is 30). (2) Wi-Fi connectivity, which allows you to easily transfer images to your phone or tablet, as well as to control your camera with your mobile device.
I agree with Doug that a small tripod like a Gorillapod is great for travel (they make multiple models for phones, point-and-shoots, and DSLRs). For video, a camera with a mic jack is helpful, but you can also use a decent recorder & mic and pair the audio later (less ideal, but doable). And, of course, be sure to get a decent memory card (class 10, which allows for faster transfer from the camera to the memory card. I wouldn’t get anything less than 16GB.