20D+cheap superzoom vs ultrazoom P&S
If you're only interested in shooting pictures, I would use the DSLR and a cheap 70-300 zoom lens. You'll get much better images than the S2.
If you think you'd enjoy also capturing video clips, go for an S2/S3/S5.
I had a Nikon D100 years ago with a Tamron 28-300 zoom (42mm-450mm with 1.5x crop factor). It was awesome for shooting sports.
Now I prefer to use the S3/S5 type cameras that can take "good" pictures of action and also shoot excellent video clips with stereo sound.
I was playing with a Canon T1i in the store recently. The video capability of DSLRs just isn't good enough yet for me to give up my S5, but I would love to get one again.