I struggled for quite a while on whether to buy the S3, due to the (what I saw as) tremendous overlap with my 20D. I've been lusting after this camera since the S1 was introduced. But the S3 won out, and I never looked back. I still use the 20D for serious shooting, but the S3 is so much fun, and so versatile, that I use it much more than I thought. In fact, for our recent trip to Maui, the S3 is the only camera I brought along.
As my family told me, "the entire family decided we would all have more fun in Maui if you DIDN'T bring your big camera!"
So far, I am VERY happy with the images I got with the S3, and my back is much happier as well, not having to lug the 20D and a lens or three around everywhere.
On a side note, I did use the RAW hack for the entire trip, and shot everything as RAW + large superfine JPG, so if I did get a 'wall picture', I have the RAW file to work with.
It was a hard decision to make, but once I made it, I'm thrilled with the camera, and the flexibility it gives me for great images, movies, and AA batteries.