Overwhelmed and don't know what to get

[kerriv]

I am so confused about what to buy. I've been reading about ILCs, bridge cameras, and enthusiast compacts. I have no idea what will meet most of my needs ... I realize there isn't a perfect camera that will fit everything.
Budget

* What budget have you allocated for buying this camera? Please be as specific as possible. I would like to keep it under $800

Size

* What size camera are you looking for? Or does size not matter at all to you?
Smaller is better. I have had DSLRs in the past and always sell them because they are to bulky, cumbersome to take many places.

Features

How many megapixels will suffice for you? Doesn't matter. I just want to take good pics.

* What optical zoom will you need? (None, Standard = 3x-4x, Ultrazoom = 10x-12x) Probably Ultrazoom

* How important is “image quality” to you? (Rate using a scale of 1-10) 10

Do you care for manual exposure modes (shutter priority, aperture priority, manual)? I don't seem to grasp how to use manual modes.

General Usage

* What will you generally use the camera for? Pics of the kids, especially at Tae kwon do.

* Will you be making big prints of your photos or not? Nothing bigger than 8x10

Will you be shooting a lot of indoor photos or low light photos? Yes

Will you be shooting sports and/or action photos? Yes

Miscellaneous

Are there particular brands you like or hate? No

Are there particular models you already have in mind? I have been looking at all different types of cameras. I really like the size of the Nikon V1.

(If applicable) Do you need any of the following special features? (Wide Angle, Image Stabilization, Weatherproof, Hotshoe, Rotating LCD) Rotating LCD, Image Stabilization

[Andy Stanton]

The Nikon 1v1 is a small, mirrorless camera with a large sensor that can use interchangeable lenses. All the major camera manufacturers have camera models in this class. They have excellent image quality but don't contain a viewfinder. Also, to get long zoom capability you'll have to buy a separate long zoom lens.

The best camera in this class that you can buy for under $800 is probably the Sony NEX 5r which, even though it's small in size and weight, has a large sensor, the size of the one in most DSLR's. Other Sony NEX cameras contain this large sensor as well, which give NEX cameras their excellent image quality. Other small mirrorless cameras are the Panasonic GF series, of which the latest is the GF5, the Olympus E-PL series, of which the latest is the E-PL5, the Nikon 1 series (including the 1v1), and the Canon EOS M, a new camera. The Canon also has a large sensor similar to the one in the Sony NEX cameras. The Olympus and Panasonic have smaller sensors and the Nikon has the smallest sensor of the group. Generally speaking, the larger the sensor, the better the image quality.

[Vogelbung]

Speaking as someone who hates carrying around large cameras (my Zeiss lenses for the SLT almost never gets carried around for that reason - the Sony RX100 or the Leica X2 are my primary cameras), I don't think even a mirrorless is a panacea for what you're looking for to be honest. While the mirrorless body is small (especially the NEX-5), the lens is still comparatively large and cumbersome. Sony is making a start with the compact powered zoom they've introduced recently but it won't be available with a camera at $800 or less.

I would steer you more towards the Olympus XZ-1 (perhaps now on closeout) or 2, or the Sony RX100 - the Sony especially with the (as with the NEX) highly automated AUTO+ mode.