I'm a newby to the forum and to photography. Is it possible to create blurred backgrounds/sharp focus on specific focal point/person/item (I think this is called bokeh) with a digital point & shoot type camera?
It's often called bokeh, but that is not a correct use of the term.
Excepts from wikipedia.org:
"Bokeh is the aesthetic quality of the blur, not the blur itself.
Bokeh is often most visible around small background highlights, such as specular reflections and light sources, which is why it's often associated with such areas. However, bokeh is not limited to highlights, as blur occurs in all out-of-focus regions of the image.
Although difficult to quantify, some lenses enhance overall image quality by producing more subjectively pleasing out-of-focus areas.
Bokeh characteristics may be quantified by examining the image's circle-of-confusion. In out-of-focus areas, each point of light becomes an image of the aperture, generally a more or less round disc. Depending how a lens is corrected for spherical aberration, the disc may be uniformly illuminated, brighter near the edge, or brighter near the center. Lenses that are poorly corrected for spherical aberration will show one kind of disc for out-of-focus points in front of the plane of focus, and a different kind for points behind. This may actually be desirable, as blur circles that are dimmer near the edges produce less-defined shapes which blend smoothly with the surrounding image. Lens manufacturers including Nikon, Canon, and Minolta make lenses designed with specific controls to change the rendering of the out-of-focus areas.
The shape of the aperture has a great influence on the subjective quality of bokeh. When a lens is stopped down to something other than its maximum aperture size (minimum f-number), out-of-focus points are blurred into the polygonal shape of the aperture rather than perfect circles. This is most apparent when a lens produces undesirable, hard-edged bokeh, therefore some lenses have aperture blades with curved edges to make the aperture more closely approximate a circle rather than a polygon. Lens designers can also increase the number of blades to achieve the same effect. Traditional "Portrait" lenses, such as the "fast" 85mm focal length models for 35mm cameras often feature almost circular aperture diaphragms, as is the case with Canon's EF 85 mm f/1.2L II lens and Nikon's 85mm f/1.4D , and are generally considered exceptional performers. A catadioptric telephoto lens displays bokehs resembling doughnuts, because its secondary mirror blocks the central part of the aperture opening. Recently, photographers have found how to exploit the shape of the bokehs by creating a simple mask out of card with the shape that the photographer wishes the bokeh to be, and placing it over the lens. Common shapes are stars and hearts, but it is possible to create it with almost any shape imagined. "