small camera w optical zoom in movie mode

I would like to find the smallest digital camera that will allow optical zoom (even just 2x or 3x) in movie mode. Canon Powershot S2 IS, Sony Cybershot DSC-H2 and Kodak EasyShare Z612 look pretty bulky - and I don't need super zoom for photos.
It should be able to take photos in typical low-light indoor settings, like parties, etc.
Would be thrilled to find one that takes AA batteries, but I know I can't have everything. :)

Thanks, Brenda! The perfect answer. Imaging-Resource.com's review noted that the TZ1 goes into "purple flare" overload at 5x to 10x, so I would need to avoid that realm - which should be fine if I can control myself with all that zoom power.

Of course, while googling around, I discoved they have just announced that the Casio EXILIM Hi-ZOOM EX-V7 Digital Camera will be coming out in a couple months....

I am sorely tempted to just go for the Canon PowerShot S2/S3 IS now (I read that the CW is that Canon beats the Sony Cybershot DSC-H2/H5) and then get an ultracompact Casio Exilim for my birthday:) Apparently, having two cameras - one more hefty, serious and heavy-duty and the other a tiny thing to always carry around - is considered quite normal.

I'd appreciate your thoughts on just sticking with the TZ1 (which would be my only camera) ORr going for the bigger and more versatile S2/S3, and then maybe picking up an ultacompact later on (when I can affort it).

BTW, no prizes for guessing that I am a novice in the digital camera arena.

UPDATE: I am going withthe TZ1. I had a brief look at the Nikon S10, which is the cutest little thing, but does not seem to do as well as the TZ1 in poor light situations. Thanks again.

Hi Alison,
Sorry I did not get back to you sooner, but it looks like you ironed this out on your own pretty well. Kudos for doing what looks like some hardcore research on this.

I am with you on the TZ1 vs. the Nikon (which is adorable). While the Panasonics do suffer in low light conditions, it is mostly the higher-megapixel Panasonics that you really have to worry about. This one at 5mp doesn't have the same problem with image noise that I see at the higher levels. And it's my opinion that the TZ1 still does better than this particular Nikon. It's also more user friendly in my opinion and I think you'll be happier with overall image quality.

If you do decide down the road to invest in something a little more heavy-duty, the Canons you mentioned are amazing. I can't say enough good things about the S3 when it comes to creative control and image quality. In the meantime the TZ1 is a nice solid choice to get you through the basics and I think you'll be satisfied.