Yes, thats it.
A 3.2mp will take a perfectly good 8 x 10 picture. A 5mp will take a perfectly good poster sized picture. Megapixels dont really matter to the quality of normal everyday pictures. Where megapixels do matter is in the editing. Mostly for cropping. The higher the megapixels, the more you can crop. However when you start getting into over 5pm cameras, you still really cant crop that much more with a point and shoot because of the quality of the lens. (however, some newer point and shoots are coming out with some pretty cool image stabelization technology that until recently was only avail in high end cameras)
Example. I have rented some pretty high quality lenses for my 12mp camera. With a lens like that on a still day with no wind,and a good tripod I could take a picture of a whole tree, then in editing, crop it down to the details of one little leaf.
By all means, Im not saying you cant take a great picture with a cheaper point and shoot. People have won awards with pictures taken with disposable cameras. Being that im into photography, I want to get my kids into it. I bought my 5 year old son a Fuji 3.2 mp camera in a pawnshop for 100 bucks. He always has it with him, so occasionally, I will grab it from him when I see a good shot. Here are two photos I have taken with my kids 100 buck pawn shop special that have both won awards.
Now a photo from about a 12mp camera which with the rented lens was worth about 7 grand.
Most people couldnt tell the difference in quality of the pictures between the 7 grand camera and the 100 buck pawn shop special.
However the shot of the balloons would be a hard shot to get with the point and shoot camera because it required some pretty special exposure techniques. But you can see that as far as quality of pictures (especially for online photos) a 3.2mp works great.
