A DSLR will take better pictures but its bigger, more cumbersome, and can be a pain to carry around.
Heres a great site for reviews:
http://www.steves-digicams.com/
You can also link to forums at Steves where you can find great info and ask some questions.
Finally, go to the store and try the cameras. Bring your wife and kid and piss around with the cameras and find which one you like best.