I've got the Fuji S5500 as a basic take-anywhere camera, and fully
recommend it - the 5600 is a little better.
The S5500 goes for around £50 on ebay now, so that'd be a bargain way
into digital photography.

As for which is better, Canon or Fuji, then you'd have to try them out
really, one may feel 'just right', while the other feels chunky and
un-intuitive.
For basic 7"x5" prints, you wouldnt be able to tell the difference
between the two, and even bigger pics it would be hard to see if there
are any differences between the two.
Steves digicams is the site with all the reviews:
http://www.steves-digicams.com/

Alan.

The Fuji Has less noise owing to a physically bigger sensor.

But I would prefer the wider angle Zoom on the Fuji then the longer tele end
on the canon

M> I have about £150 to spend but dont mind putting extra in for the right
M> camera.
M>
M> Is the Canon PowerShot S3 IS better than the Fujifilm S5600?? I know its a
M> little more expensive, I am just a kind of point and shoot person and dont
M> understand all the different settings. I know the canon is 1mp more but will
M> tht really show??
M>
M> Thanks Millan
M>
M>
M>

For £135 you could get a Fuji S5700.  
http://www.fotosense.co.uk/shop/Fuji/Digital_Cameras/Fuji_FinePix_S6500fd_Digita
l_Camera.asp?productID=5325&tabID=

Reviewed at http://www.steves-digicams.com/2007_reviews/fuji_s700.html so
you can compare with your original choice.

For £189 you can get the S6500 and that has got a 28mm (equivalent on 35
mm camera) at the wide angle end, a bigger sensor, 230,000 pixel lcd (but
you should compare viewfinder lcd resolutions as well)
http://www.fotosense.co.uk/shop/Fuji/Digital_Cameras/Fuji_FinePix_S6500fd_Digita
l_Camera.asp?productID=4118&tabID=

£161.05 at http://www.cameras2u.com/products/details.cfm?product=N078790A

I can't find the Canon at that sort of price on favourite set of websites