Spot on Robin.
I've seen results from the latest generation of compact and bridge cameras and they ain't half bad.
The latest Fuji sensor for example has the option to combine multiple exposures to create an in HDR and so avoiding burnt out skies, blocked in shadows etc.
In very general terms a fixed focal length lens will optically outperform most zooms, since they (zooms) are very much a compromise - you don't get 'owt for nowt as they say.
Ultimately it's down to the individual to decide whether it's worth the effort to lug about a large body (no inference should be drawn here

) and a couple of extra lenses.
Personally I find it quite therapeutic...I have a stressful occupation (in relative terms) so I tend to lose myself in considering which focal length/aperture or effect I'm seeking to create from a scene as well as being able to just pick up and shoot.
Equally the best kit in the world won't make you a photographer if you haven't the eye for composition and a little attention to detail as well as breaking the rules now and then.
For a prime example of this I've seen a Flickr page where the guy was using a Sony A700 DSL (not cheap) and the resulting pics may as well been taken on a camera-phone...purely objective crit you understand.