I will be travelling to countries where an expensive camera would
attract too much attention. I would love to take an LX3, G11 or Nikon
D40, but would not feel comfortable with it.

I would also prefer "pocket-size", or a maybe bit larger, for being as
inconspicuous as possible.

If I go down in price a few steps, what digital point-and-shoot
cameras with a mid-range zoom have the better reputation for quality
images.

canon g11 or S90 has above average sensor size, but still small compared to
DSLR

if you need even better low light camera, then consider a micro 4/3
camera -- but this more than doubles the cost. In fact they cost more than
some DSLRs.

You can get a feel of low light capabilities by going to dpreview.com and
checking out the sample photos of each camera. Sample photos are taken in
different ISO settings.

(resent due to possible problem with nntp server)