Am actually confused on the term mirrorless. Can someone explain what is it?
Also been using Canon 650 D for about 4 - 5 months and now thinking of getting a compact camera along the range of Sony Nex series..
Am actually considering a few
Nex 5N , Canon M , or Nikon J1? Any other recommendation? Budget around 1.2K
Basically the term mirrorless cam means - the camera was without the mirror assembly. It allows the camera to be smaller in size, but of course it would not have phase detect AF, and so most mirrorless camera came with contrast detect AF. In the past the contrast detect AF is slower (by quite a fair bit) as compare to the phase detect AF system, this is no longer the case.
Another different was that most mirrorless (or should I say all) cam have either liveview and some had EVF (electronic viewfinders) as oppose to DSLR's Optical Viewfinder. The main different in this was that for OVF, whatever you see through the OVF was what your lens 'see', and as for the EVF, what ever you see in the EVF was what your sensor 'see'. Some would swear by the EVF, some was all for the OVF, and all I could say it all boils down to personal preference. For me, both also can (I owned the Canon 7D and Olympus OM-D). The only problem with the EVF that I don't really appreciate (at least for the OM-D case) was that the EVF had a very short lag in between shots.
Anyway, as for recommending you a mirrorless cam... I would certainly recommend that you go down to the shop yourself and had a feel of the cameras. Some people love the Sony NEX (not me, somehow it was not a cam for me, but I love the Sony DSLT though), and others like the Nikon, the Olympus, the Panasonic and whatever.
Image quality wise, all of them are pretty alright, although the Nikon J1/V1 and the Pentax Q had the smallest sensors of the group, which theoretically might have a poorer high ISO performance as compared to bigger sensored offering from Sony, Canon, Olympus, Panasonic and Pentax (K01) - and of course Leica (M-series).
Do note the following,
Sony/ Pentax (k01)/ Leica M8/ Samsung all had APS-C sensor (and their sensor is slightly bigger than Canon's APS-C sensor) - 1.5x crop factor
Canon (EOS-M) had APS-C sensor (1.6x crop factor)
Olympus and Panasonic had m4/3 sensor - 2x crop factor
Leica M9 - Fullframe sensor (no crop factor here)
Nikon J1/V1 - small sensor (crop factor 2.7x)
Pentax Q - small sensor (crop factor 5.5x)
Since you already have a Canon DSLR, you might want to look more deeply into the EOS-M, since with an adapter, you can attach all your EF-S/ EF mount lens. However you do want to take note that for the EOS-M the focusing speed is nothing spectacular (and that is one reason I am giving it a pass).
The other smaller camera that you should look at was the m4/3 camera (Olympus and Panasonic), they have blazing speed, good dynamic range, great lens lineup, small size, etc etc (I know, and I love my OM-D alot). Also don't forget to check out the Sony's DSLT too, the A37 is a small and light little package - although not as small as the NEX, but the size is still small (at least to me).