What are the differences between an entry-level DSLR and a Canon Powershot?
The main differences between Canon's dSLR bodies and the Powershots are:
- The Powershot will have a fixed lens that cannot be changed
- The Powershots use smaller sensors (the largest is the 4/3"-format in the G1X series, more typically a 1" in the high-end and 1/2.3" format in the low end), while the dSLRs use APS-C or full-frame sensors.
- Current Powershots limit you to liveview to compose (either on an LCD or through an electronic viewfinder), while Canon's dSLRs use an optical viewfinder with a mirror reflecting the light coming through the taking lens up into a pentaprism/pentamirror to turn the view right way 'round again in the viewfinder.
- dSLRs often have more ways of communicating with additional gear, such as cable release ports, flash hotshoes, and flash sync ports
- Some lower end Powershots (e.g., the ELPHs) may lack the PSAM modes, relying entirely on scene modes, and most of the powershots (aside from the G# X high-end series) lack RAW capability and shoot only JPEG.
The EOS M mirrorless series is the weird midpoint hybridization of these two types of cameras. The EOS M bodies allow you swap lenses, and use the larger APS-C sensors the lower-end dSLRs use, but you are still limited to liveview for composition and may lack a viewfinder or flash hotshoe.
... is it necessary for an amateur to own a DSLR over a point and shoot camera such as a Canon Powershot?
No. My personal criteria for a "serious" camera is RAW, PSAM modes, and (optionally) a flash hotshoe, all of which can be found on Powershot models (albeit the higher end ones). A smaller sensor and a fixed lens can limit what you can shoot and the effects you can achieve, but within those limits, you can still take great photographs if you have good technique. The reasons to go with an EOS M or EOS digital camera would be if you need to go past those limits.
These days, older used dSLR gear is abundant at prices that are similar to those of new Powershots, though. So, if you're thinking of a Powershot as simply a way to save money, understand, that your major price savings with a Powershot will be in not buying lenses, not in the camera prices.
See also: What do I need to consider to choose between dSLR, mirrorless, or a compact as my first "serious" camera?