Olympus F280. Small size, 8 mega pixels, 3x optical, large 2.5 lcd.
Check it out here http://www.olympusamerica.com/cpg_section/product.asp?product=1318&fl=4
I've watched the price drop from $189 to $159 at Sam's Club (due to X-mas and more cameras being offered).
The extra money you save you can invest into a memory card (not included with this model).

I find it nearly impossible to keep up with the latest trends (let alone the full capabilities of my own two-year-old digital camera), but check out this website for info and comparisons:

http://www.dpreview.com/

I think they cover many price ranges. I'd avoid the camera you have pictured.

I was a "professional photographer" for a while, and to that extent I was a purist, in that I refused to take pictures with anything other than an SLR. (a big ol' camera with interchangeable lenses) Then I went on vacation to Europe, where I did NOT want to lug a huge camera bag across the whole continent. So I went to Best Buy and started playing with all their 'point-n-shoot' cameras.

After playing with many different cameras, I decided on the Canon Digital Elph PowerShot SD750. After spending a month in Europe, I can say with a high level of certainty that this may be the greatest little gadget ever created.

The SD750 takes GREAT pictures. Crisp and clear images are displayed on a huge 3-inch LCD screen on the back. It takes pictures at 7, 4 and 2 megapixels and even at "e-mail resolution" at 640x480 pixels. I have only maxed out my 2-gig memory card once, even though I brought back 2400 images from vacation, plus about 50 videos. The video features are awesome! The photo features are out of this world -- I have yet to use all of them. BONUS -- it can also record WAVE sound files (perfect for recording street performers), mono but at 44K -- that's CD-quality.

Truly, I can't say enough good things about this little guy.

That's my $.02.

I have a Canon PowerShot SD800 with image stabilization. My boyfriend gave it to me as a gift and he did a lot of research before buying it. It is absolutely fabulous and it recently dropped in price (a lot). http://reviews.cnet.com/digital-cameras/canon-powershot-sd800-is/4505-6501_7-32069607.html

I'd get the best cannon in your price range - you won't be disappointed. I find the canons generally have the best image quality and interface of all point-and-shoot digital cameras.

I second the Canon SD800 advice.

You can get some great information and advice at Steve's Digicams.
http://www.steves-digicams.com/
Click The Best Cameras from the left side menu.

Go with the Canon Powershot series - you WILL be satisfied. Take the suggestion above and check http://www.dpreview.com/ for the best product comparisons as well.

Canon makes nice little cameras. We have the SD550 - a bit older with no image stabilization, but still a great little camera. There is the SD700, SD800, SD1000 - I'm not up on the differences between all these new models, but clearly the little Canons are the obvious choice...

I always highly recommend the Panasonic Lumix DMC-FX01. It's a fantastic camera with a Leica lens (!) all for under $250.

I just purchased the Panasonic Lumix DMC-FX30. THis is virtually the same camera recommended by Barrett. We bought it to replace our Canon Powershot A620. The Panasonic was about $100 cheaper. So far, it is the best digital camera I have owned (#4). Of the many features I like, the tiny size is great, the recharging feature is good (you don't need a computer), and the three dozen or so pre-set photo settings are easy to locate and use.

I primarily use a DSLR, but have been seriously looking at the camera Berrett mentions as a pocket camera. But, you also will have a good chance of happiness with the Canon point and shoot models. I had a PowerShot for a few years and was happy with it. The model I had would actually let you use lens adapters for wide-angle, telephoto etc.

I have the Canon Powershot SD630/Digital Elph.

I never leave home without it. I got it for about $300, but that was about a year ago, so maybe the price has dropped.

It's small and quick and it takes great snappahs. What more could you want?!

PS--My sis, Alexis, lives in Duluth. Maybe y'all is neighbourz.

we're about to embark on our third digital camera purchase in a year. #1 got ripped off and #2's LCD has recently gone kaput (it broke). It'll still shoot, but you can't review...which kinda harkens back to the days of my mom's old point and shoot with the square flash cube. You don't know what you're gonna get.

On that note...Kodak makes a very fine product...simple and easy to use...with plenty of support and software to print publish and share your work with friends. It's also universal software, so if you own two different Kodak cameras, you can use the same program.

I have a Canon -- powershot 520 i think? i bought one a year or two ago, lost it on the way home from a trip, at O'Hare. Bought the same one on Ebay. I really love it. I like the size, I like the photo quality, I like everything about it. Canon is a good brand. My 10 year old wants a digital camera, I am thinking of getting her a basic Fuji or Casio brand.

I am currently searching for a new digital camera and could use some advice. I am by no means at the professional level, but have taken a photography class in the past and love the option of manual controls, focal length, aperture, etc. However, I hate the thought of spending over $500 + lenses. I thought the prosumer/SLR-like cameras would be perfect for me and my interests, but I've been told by camera shop employees that it can be quite difficult to get to these options on prosumer cameras. I was looking at the Cannon S5 IS or the Fujifilm Finepix S6000fd. Does anyone have any insight on this subject with regards to 1.) compact vs. prosumer vs. SLR for my specific interest, 2.) any specific models from any of the above categories that would give me what I want without having to break the bank?

Thanks so much!

I would encourage everyone to buy a Nikon D40. Not that I know it to be a quality camera or anything. But I figure if they start moving like hotcakes perhaps every single magazine I get won't have a little cardboard D40 inside. I'm getting about 8 of these suckers a month. And I have to remove them because the magazine doesn't fold over right for easy reading with that stupid camera in there. It's starting to get as bad as those damn AOL discs back in the days of dial-up internet.