Many folks out there see people taking photographs with a great big "professional" SLR and think; "Well, If I had all that gear he has I could take good photos..."
Other people might spend thousands of dollars on "professional" equipment and wonder why there photographs aren't improving.
Having good equipment will let you get photos that you that you'd otherwise miss, but it won't make you a better photographer.
I really believe that the things that make the biggest difference to your photography - composition, subject, colour - can be learned with any camera.
But to be realistic, you have to work within the limitations of a compact camera. It's tiny digital sensor means you'll have a tough time getting a pocket-sized camera to work well in low-light or fast action situations. You're stuck with the lens that's attached to the camera, so you probably won't be able to get that shallow-focused soft background you see in some portraits.
A small camera will work great in good light with still or slow-moving subjects. Concentrate on the composition, the colours, the interesting subjects, and polish the photos up with some post-processing.
After all - when we're talking about content - a good photo is a good photo whether it's taken with an iPhone or a Hassleblad.
The secret to this photo was the fantastic natural light and a simple black and white conversion. The workshop of los hermanos Juarez in Antigua, Guatemala had the left side of the room completely open to the light, and sun pouring through windows on the right. I could not have set up studio-strobes better than the available light that day.
Simple straight-on compositions work well with any camera.
My battered Lumix LX2 never leaves my side.
For simple compositions with bright colours on an overcast day, a compact camera can do just as well as an SLR could.
I found the doors and walls were an interesting enough subject that they overcame the technical imperfections of the camera.
Blasting the new higway down the Baja. When you are travelling by motorcycle, you want a camera in a pocket. You can use a compact without having to get off of the motorcycle or take off your helmet.
Nice afternoon light filtering through clouds and a compelling subject. These conditions are certainly within the capabilities of a compact.
People react differently to a compact camera than they do any large camera. not better or worse, just different I write about this in the "Social Studies" section on page 9 of Motojournalism Book Two
My personal photographic style has a tightly-cropped graphic aesthetic. Many of my favourite photos have been taken with compact cameras.
Even if you carry an SLR, a compact is a great backup. My Nikon D200 went kaput in Palenque, Mexico, but I still had the little LX2 compact to work with. I really wished I had my SLR at Chichen Itza, a few days later, but being limited to the compact camera forced me to be creative with my compositions.
If you can find a stable platform for your compact, and use the self-timer to avoid camera shake, you can get good photos of still objects in low-light.
Take the time to experiment and to learn to work within the limitations of the camera equipment that you have now. You'll reap much greater rewards by investing in your technique than you will investing in the latest-and-greatest equipment.