Looking at a new camera for backpacking

Brad, I don't think you will be disappointed. Sounds like you know a fair amount when it comes to photography principles. The S95 is going to be such an amazing improvement over what you are using and it's probably not much bigger. Do post a new batch of photos for us. You know like…before and after camera makeover ;)

Rather than change the ISO to a higher number to get faster shutter speeds, use aperture prority and choose a low number (wider aperture) to get the faster shutter speeds.

Yes but if at the widest aperture your shutter speed is still not high enough, then you need to increase the ISO.
ISO400 F2.8 1/125 = ISO 800 F2.8 1/250
Franco

Currently, lots of lightweight backpackers are trying to avoid carrying heavy glass, such as an f2.8 or faster lens. So, with a slower lens, they are often already up against the wall on aperture, and the only way to push the shutter speed faster is to kick the ISO up. It's all a vicious cycle.

–B.G.–

To compound the problem , most (practically all…) start at one aperture on wide, say F3.5 and end at a much slower on tele, around F5.6

So that F2.8 at 125 (1/125) at 400iso becomes an F5.6 at 30 (1/30) 4x longer shutter speed…
to retain the 125th shutter speed (from F2.8 to F5.6) you need to bump the iso to 1600

But Fujifilm has just announced the X10 with a 4x zoom (28-112mm) starting at F2 on wide and at F2.8 on tele with also a largish sensor at around 12oz with batt.
http://www.dpreview.com/news/1109/11090102fujifilmx10.asp
Franco

A Canon waterproof case for $200 sounds like the case intended for scuba diving – they are bulky and in many cases don't give access to all the buttons on the camera.