I used a compact digicam for about two years (Nikon Coolpx 5400), but could never come to terms with the slow start up, slow focusing, need to look at the scene through the LED screen, and the extremely short battery life. Photography is too important and the ability to control the whole process too integral in my composing photos that I decided to grunt a bit and switch to a DSLR. I now use a Nikon D70s and have just ordered the 18 – 200 VR lens, which will replace most of what I carry to just one lens, and in many cases will preclude the need for a heavy tripod, though I am carrying a gorillapod slr-zoom.
This made finding an appropriate camera bag quite a challenge. I tried everything I could find here in Japan, from LowePro waist bags to Hakuba waist bags to Mountainsmith waist photobags to MontBell waist photobags to chest harness systems and triangular photobags for cameras with long lenses fitted to the waist or chest. Everything was either too bulky or heavy and stuck out from my waist or abdomen or chest, as Kevin said.
While not perfect, the solution I've come up with for now is a MontBell 4 liter Trail Lumber Pack fitted with closed cell foam inserts that I cut myself. It is relatively lightweight, fits tightly against my waist so that it doesn't move while climbing, has a wide zipper opening for easily removing the camera, and has hip-belt pockets where I can put my batteries and rain cover (which doubles as a camera rain cover… it's made by MontBell and allows you quick access to the camera from your chest while walking in the rain). It's big enough for my lens hood, remote control, right-angle-viewer (I take lots of macro shots of insects in hard to see view points), CF cards, and spare batteries.
For my trip to the Alps this summer I might make the whole thing even simpler, by putting the camera into a waterproof, padded camera drybag, the 3 liter MontBell Protection Aquapel, which I would simply stash in my pack when not using the camera. It only weighs 115 gr, so is considerably lighter. But it is a bit of a pain to get the camera out. I'm thinking of adding fleece to my MB Camera Rain Cover instead, which acts as a wrap, so that the camera would be protected both from rain and knocks in an easily accessed cover.
I came across the Ricoh Caplio GX100 compact digital the other day, with its 16 mm (24 mm equivalent) lens and electronic viewfiender. Looks very promising, but then I'm still worried about battery life and start up speed. If it improves on what I have with the Nikon 5400 then it might be something to consider. The camera pack weight will really come down then. And I hate carrying camera weight!