SLR means 'Single Lens Reflex' and it was much more applicable in the days of film cameras, when the mirror behind the lens (which bounced the image coming through the lens up to the eyepiece) would flip up and expose the film behind it, capturing the same image you were seeing through the viewfinder.

Honestly I don't know how these new digital 'SLRs' work, but I bet you they have no flippy mirror in the inside. :p

Really, the difference between DSLR and the digital point-and-shoot cameras these days is that the DSLRs have all the manual controls of their old film-using counterparts -- manual ISO, aperture and film speed control, mostly. The digital point-and-shoots have computers that judge all those things for you, giving you overall good photos, but no artistic control for pushing, pulling, depth of field, stuff like that. The big DSLRs will do that too, but if you're not going to be using those features there's really no point to having manual control (IMHO).

I don't know much about the comparison of the larger-bodied point-n-shoots vs. the smaller ones, unfortunately. :-\

I want a new camera too. My old Canon Elph (which I love) is showing its age after all these years... *is torn*