Our gadget-loving siblings at Gizmodo offer a detailed, straightforward explanation of why more megapixels doesn't always mean a better camera. These days everything's cramming more megapixels into their cameras—like Sony Ericsson's crazy 12-megapixel cameraphone, for example—but that doesn't mean that the 12-megapixel cameraphone produces results close to what even a 10-megapixel DSLR could do.
Obviously, there's a world of difference between the image quality you're going to get out each of those. Most of it comes down to the size of the sensor and the pixels. You can fit a much bigger sensor inside of a DSLR than you can inside of a mobile phone, which not only means you can fit more pixels on the sensor, you can fit much bigger ones—imagine bigger buckets to catch the light. Sure enough, the sensors inside of DSLRs are huge compared to the ones in compacts
Check out Gizmodo's post for the full detailed rundown—including their nice analogy comparing pixels to light-catching buckets, which makes a lot of sense to the uninitiated. If you're a shutterbug, let's hear your thoughts in the comments.