This is a message to all of you iPhone lovers, galaxy III advocates or whatever other type of smartphone you own. Your phone is NOT a camera!!! it is a phone with some camera like abilities.
i will never try and argue that it is useless as a camera, because one can use a camera for different purposes, not only to create a work of art, but also snapshot and document family events (notice i used the word snapshot and not photograph), or use it as an aid to remember where the car is parked in a huge parking lot (by taking a snapshot of the parking space #), these are just a few of the examples illustrating the usefulness of a phone with a small camera like device.
So what is the difference between a phone camera and a dedicated camera? Good question. In this post I will try to point out those differences, hopefully it will give you a clearer picture and will send you to buy a decent dedicated camera in case you don't have one yet.
The sensors of camera phones are typically much smaller than those of typical compact cameras, allowing greater miniaturization of the electrical and optical components. Sensor sizes of around 1/6" are common in camera phones, webcams and digital camcorders. 
So What? You ask. "We have been taught that size does not matter" (you say)... Well friends it does, a lot!!!
Generally speaking in contemporary cameras and today's technology a bigger sensor immediately translates to superior results. A bigger sensor carries the following benefits:
Dynamic range defines the range of tones that a sensor is able to register. The range is from black or near black pixels to completely white pixels. The following example shows a high and lower dynamic range compared to the original (the range is from left - white to the red dot - black).
Because bigger sensor usually means bigger pixels and bigger pixels have bigger photon capacity, it ,means that bigger sensors will usually have better dynamic range. Putting it plainly it will capture bigger range of tones from the frame you are taking.
Image noise is random (not present in the object imaged) variation of brightness or color information in images, and is usually an aspect of electronic noise. It can be produced by the sensor and circuitry of a scanner or digital camera. Image noise can also originate in film grain and in the unavoidable shot of an ideal photon detector. Image noise is an undesirable by-product of image capture that adds spurious and extraneous information.
Same as with the case of dynamic range, bigger pixels receive a greater amount of photons per time, so their light sensitivity is much stronger. For a given amount of background noise, this produces a higher signal to noise ratio — resulting in a smoother looking photo.
This image illustrate relatively high noise levels (notice the grains).
There are other important aspects that come into play when considering the sensor size. i will just mention a couple of them without diving into the details:
1. depth of field - decreases with a larger sensor.
2. crop factor - decreases with a larger sensor.
I know most of you out there use automatic camera control even if your dedicated camera have the ability for manual control or at least allows you to select from a predefined out of the box manufacturer settings that might fit the scene better (like sport mode or portrait, etc`). I am not trying to say i am against automatic mode, it's just that it perform reasonably when the frame is not challenging, in this case the camera's "computer" will have an easy job deciding the exposer time and aperture and the results will be reasonable. But in reality many of the frames we take are more complex than that, they can have very high contrast, moving subjects, low light to mention some which will highly challenge the cameras` "computer" and metering system and usually will produce less them optimal results. in many dedicated cameras (versus mobile devices "cameras") you will have some additional control and not just automatic point and shoot mode, even if it out of the box predefined scene settings, it is still better than full automatic mode that will fail to produce decent results.
it is really easy to understand that a dedicated camera will have superior glass and optics system than any mobile device out there, the reason is simple, while the camera can use it's device real-estate for better optics and better metering system, the phone is geared to be as slimmer as possible and uses most of it's real-estate (which is not much to begin with) for screen, battery, microphone, speaker and other perks that phones carry nowadays. The quality of the glass of a camera has a direct impact on the image quality. to take a drastic example, imagine yourself wearing glasses that are scratched and stained in comparison with new glasses that you just bought. The world looks very different in each of the cases. Same in the cae of cameras; The glass is basically a filter between the sensor and the outside world, the purer and high quality of filter we have, the better quality of light our cameras` sensor will receive.
A dedicated camera (of decent brand and build) will have superior performance (and potentially results) over a mobile device "wannabe" camera.
Invest in yourself and buy a decent camera so you will not miss those photos that you could have taken in low light or not so optimal conditions.
More importantly, when you ask me "which camera should i get? i currently using the camera on my mobile phone...." remember: Your Phone is NOT a Camera!
 - wikipedia, Image Sensor Format
 - wikipedia, Image Noise