Canon sd 970, 990, and 880 at current Amazon price points

I would buy the 880 over the 970, unless you wanted/needed 720p HD Video (which you mentioned you didn't). Both the 880 and 970 use the same identical sensor and the 880 doesn't pack as many photocells onto the sensor making it more sensitive in low light and also providing better detail with less smearing. More MP here doesn't mean better image quality.

I would buy the 990 over the 880, unless you absolutely want/need the 28mm wide lens of the 880. The 990 uses a larger sensor than the 880 (or the 970) and adds better detail and lower light resolution to your shooting. The 990 also add a viewfinder to frame with, and flash compensation so you don't have to settle for washed out faces in indoor shots. For more natural looking light step the flash down a notch. Or for whole room lighting step it up a notch. It really does make the flash produce much nicer lighting. Neither the SD880 or the SD970 have flash compensation, so the SD990 has the advantage here.

Neither the sd880 or the sd990 will take as good of pictures as your D60 (especially enlarged above 8x10), but the SD990 is the one that I've coupled with my Nikon D50 because it takes the nicest pictures without lugging around the D50 everywhere. For dedicated photo shooting, lug your D60 and a good all around zoom or fast prime lens. For everyday purse/belt/pocket carry, slip either the SD880 (for the smallest thinnest one) or the SD990 (for the best detail/clarity/flash) into you pocket and you'll have a great combination.

Just having a little camera around, that produces good images, will have you capturing more photos than you would with a single larger DSLR sitting in the closet waiting to be hauled out for special occasions.