Help with Picking a Digital Camera Please

I've been shopping for a new digital camera. Mine is eating up batteries after a few pictures. Something is up. It's three years old and is out in the weather often so I am not surprised. I also dropped it once about a year ago. And it occurred to me today when I was in Walmart armed with my Consumer Reports mag, that you guys would a be a great source of info. You are all bloggers (well most of you) and you have cameras. So............. what do you recommend? I know I want a big LCD, not less than 2.5 inches. I know I don't care about shutter lag (time to boot up and take 1st pic). Nor do I care about battery life. I do care about next picture lag time, quality of pic, want about 4MP or greater optical zoom and don't care about digital zoom, I never use it. I want manual settings, and image stabilization. Preferably a continuous picture taking setting too. The smaller the camera the better, as it has to easily fit in my jacket pocket. It needs decent video too. I have found that I use it on my digital camera more frequently than my cam corder. I don't want to spend more than $250 because I use it for work and it will probably get dropped again or snowed/rained on. But in the meantime I want the best pics I can take. Any recommendations, my friends?

If you haven't heard of Retrevo by the way, it is an awesome site for reviews on electronics.