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PS: Take some shots at low shutter speed with IS on and some with IS off to check that it functions properly AND quietly.
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I haven't been checking here as often as before, and just saw your cross-post in your original baby thread. There isn't much I can add to all the good advice already given, so I'll just pass along my experience. My little ones are 5 and 7 years old now.
When they were about 1 year old, I didn't see a need for a longer lens... which isn't to say that I don't recommend the 70-200mm. I've got the f/2.8 IS II and I love it. But, I initially got it to shoot a friend's wedding, not for the kids. It's also nearly killed me carrying it around all day. Worse, carrying around 15-lbs of gear *and* a 36-lb kid; not so bad for a day out, but I needed a beer and chiropractor after a week at Disney World in August.
I'm telling you that, because that's when I decided to get the PowerShot G15. I decided on it over the S110 mainly for HD video and the external flash-shoe. For out-and-about (and Disney), it covered all the important shots, which is a decent snap-shot... even Disney's photographers just give you a decent snap-shot.
For stage performances, I've had my wife sit up front with the G15, while I'm behind everyone with my 5DII, 70-200, and Rode Mic Pro. The results are comparable... actually, I get slightly better audio with the Rode Mic at 50-ft than she did at 15-ft.
Back to lens choice, I found that the 55mm to 70mm gap between the 17-55mm and 70-200mm on my 50D is where I wanted to shoot indoors. I was at 55mm and wishing I could zoom in a bit more, or at 70mm and backing up to a wall. I have the 24-105mm f/4 IS, but it was too slow. Most of that was solved when I got the 5DII. Now, I switch between the 24-105mm and the 70-200mm.
I keep the 50D around for outdoor action, like when we scored free tickets to a Washington Nationals game (top pics). If you're wondering, wife said no pics of the kids on the open internet.
http://www.jimslamepics.com/
