I have the Canon SX40 and love it. The image quality is great for this type of camera.
Like any point and shoot, it has limitations -- mainly low light. The 35x zoom is lots of fun, but again has the limitations of a cheap zoom lens. Especially with bird photography, chromatic aberration is sometimes an issue (the blue/purple fringe phenomenon). The autofocus is a little slow on the Canon.
You can see some examples on
my Flickr.
Panasonic and Nikon have cameras in the same category. My friend is getting great results with a Panasonic Lumix (not sure which one).
A good source of information about all cameras is
dpreview.