Regular digital or digitial SLR?

I've had a digital camera for almost 4 years (Toshiba PDR - M70) and I've
never been happy with the quality of picture. It's 3.2 mega pixel, I always
use the highest resolution, and I mostly "point and shoot." The colors seem
OK, but the pictures are usually blurry/fuzzy.

I would like to invest in a new camera. I have three young kids and mostly
take pictures of them, both indoors and out. I am considering cameras such
as Sony DSC P150, Canon G6, and Canon Digital Rebel.

My question: Would I be happy enough with a "point and shoot," or is the
picture quality significantly enough better that I should step up to a
digital SLR prosumer type camera? All things being equal I'd rather not
spend the $900 or so plus lug around a bigger camera (plus the manual
options scare my technophopic wife), but if the result is that much better,
it's a fai trade-off.

Thanks in advance.

Jeff