I'm thinking of up grading my digital camera, the one I have at the moment has 2 million pixels. The pictures it takes are very good, but I thought for astronomy I would need more pixels, is this correct?
More pixels usualy mean a larger chip, and therefore you get to image more of the sky. A webcam is usualy around 640x480 pixels, 1/3 megapixel and produces very good results, as does Tony Buicks camera, which I think is a 3mega pixel camera. The main deal is how you attach the camera to the telescope, binocular, etc or if you just take wide field 'constellation' pictures then you don't even need to track the sky, if you can either set the camera to bulb or have 15-30 second exposure time open to you you can get some good pics.
Another consideration is the SIZE of the pixels. There are a lot of cameras offering up to 5 Mega pixels, however the chip is tiny and will therefore offer noisy images and bad low light capability.
It would be better to look for one with a larger chip size and lower resolution than high resolution and small chip size.
so in other words, yes, no or irrelevant based on what you want to photograph.
However, as Paul said, long exposure capability is a requirement (astronomy is done in the dark, after all :) )
If you take a look at the Astrophotography section, Paul (Whitters is his usual username) has recently been posting his results from his Canon digital camera. However, make sure you set your expectations carefully about the sort of results possible with a "point and shoot" digital camera. Most of the images you can see in the gallery and on this forum are taken with very different equipment.