Not that many years ago, camera selections were limited to just a few basic types. There were Poloriods (the first camera I remember owning) where the picture was taken and developed immediately in front of your eyes like magic. There was also the 35mm SLR (or Single Lens Reflection for the layman). These were very high dollar and risky if you didn't know what you were doing primarily because they were fully manual. You had to set the aperture and shutter speed and pray you took a good picture.
A few years later, as cameras became more commonplace, camera companies developed the Point-and-Shoot camera. The beauty of this was that the user did not have to set anything. They simply pointed the camera at their subject, pressed a button and the camera did all the rest. This made photography very popular.
As time went on, people were wanting better cameras with more features so companies began outfitting settings on the camera that the user could set to adjust the settings specifically for certain situations like landscapes, portraits or even fireworks. Because of the desire for better cameras, technology took the huge leap to digital where film was replaced with memory cards.
Today, we see digital cameras (both point and shoot as well as DSLR's or digital SLR's) that are very affordable that give us so much control that sometimes people can get intimidated . Rest assured, there is a camera that will suit you to a tee.
So we finally get to the big question: What camera is best for me? The answer comes down a few simple comparisons:
1) Customization
Many people are looking for a camera that they can add to or change things out. If this is you, then you are looking for a DSLR. These give you the most flexibility by allowing you to change out lenses, add flashes or use filters.
However, if you want something that you can pick up and use without a thought, then a point and shoot might be for you. These cameras have everything they need built right into it.
2) Portability
Point and Shoot cameras are extremely portable. They are very compact and can be easily stored in purses or shirt pockets
DSLR's are the opposite. They have larger bodies, the lenses stick out further and are much heavier than the smaller point and shoots.
3) Available Options
This can be a tough one. In days past, the point and shoot camers were very limited. Nowadays, these cameras have a ton of features. Many of these features are presets for landscape, fireworks, beach, low light, etc.
However, with DSLR's as of late, you get those features plus much more. You can get things like Aperature Priority or Shutter Priority where you set one and the other will be set for you. Think of this like a partial manual mode. You also get the ability to shoot in full manual mode giving you total control of the camera.
As an added bonus, the DSLR has the capability of having flashes and specific lenses like super telephoto lenses or fisheye lenses. These simply increase the capibilities of the camera.
3) Price
Let's be honest here. DSLR's are much more expensive than a point and shoot. This is primarily due to the technology in the sensors and other internal componentry. Lenses and flash units also add to this overall cost.
4) Desire to Grow
This, to me, is the single most important question to ask yourself. As a photographer, it is easy for me to say, "Yes, I want to grow!" However, this sentiment is not shared by everyone. Some people are happy with where they are at and that is perfectly fine. My hope is that because you are reading this, you want to grow.
In my humble opinion, if you are the person looking to grow, the DSLR is the way to go. The reason I say this is because it gives you the most versatility in a camera. Full automatic to full manual, these cameras allow the user to progressively challenge themselves.
Finial Thoughts
Ultimately, the decision is yours. My opinion is that if your budget allows it, spend the extra on a DSLR that will allow you to grow as a photographer and give you the flexibility to put the lenses you need on to get the image you are looking for. This is not to say that a point and shoot camera can't get good pictures. I have seen great images from camera phones. It is all about where you want to take your photography.
Consider everything put before you here. Take the time to play with cameras in the store and ask, ask, ask questions!!! The more you know about your camera, the better photographer you will become. Make it a part of you. Make it second nature to find the settings you need before the opportunity leaves. Most of all, enjoy the art of photography!