This is such a fun challenge for me to host. I'm a firm believer in the abilities of the p&s digital cameras of today. The past 3 years or so have produced some amazing advances in p&s cameras. Some of my all time favorite images were taken with my panasonic fz30. Too bad the image quality isn't what the k10d gives me though.
Still most shots print up quite nicely to 8x10 at least. That is what I love about this particular challenge. It really showcases the photographer behind the camera imho.