This is an article by David Pogue in the New York Times. He describes a test, done twice, where identical prints are made at three different megapixel densities. In spite of what most people think, almost no one can tell the difference between the prints. They are essentially identical.
So, this means that in choosing a camera megapixels are just one factor. The lens, electronics, storage capacity, etc. are equally as important.
I just upgraded from my three year old Gateway 5 megapixel camera to a 6 megapixel Panasonic DMC-FZ7. I was looking for the zoom lens (12X vs. 3X optical) and the faster response time in a newer camera. Also, to be honest, I couldn't afford the 8 or 9 megapixel model.
