With the freefall in film camera production, Canon, Nikon, Kodak, and the other camera giants are racing along to the next big thing. Digital cameras seem to have been the death knell of film cameras. And now the megapixel race, which seems to have consumed the industry in recent months, is grinding to a halt as well.

“In compact cameras, I think that the megapixel race is pretty much over,” says Chuck Westfall, director of media for Canon’s camera marketing group. “Seven- and eight-megapixel cameras seem to be more than adequate. We can easily go up to a 13-by-19 print and see very, very clear detail.”

That’s been the goal all along, really—the idea of a digital camera that can produce a print that is as detailed as one from a film camera. Kodak (with its V570) and Sony (with its M2) now sport digital cameras that resemble film cameras in nearly every way, and they have hi-res prints to match.

Perhaps the main factor behind all of this, though, is the drive for innovation. The same impetus that drove camera makers to escalate their megapixel offerings is now prompting them to add other functionalities in their cameras, including image stabilizers, camcorder options (Canon’s PowerShot S80 comes to mind, with its 1024×768 movie capability), zoom-and-refocus specialties, video games, and even wireless connectivity. (Kodak offers the EasyShare-One, which can send photos wirelessly, either to a Kodak web page or as email attachments.)

There’s only more of that to come, as the powers that be push the envelope by redefining what it means to do so. The result is cameras that look like they used to but have all-new guts and glory.

Thanks David Pogue, NY Times.