There are currently four digital cameras in my family: my older Fuji S602 Zoom (http://www.steves-digicams.com/2002_...ji_s602z.html), my wife's ultracompact Canon SD200 (http://www.steves-digicams.com/2004_reviews/sd200.html), my son's new ultracompact Sony DSC-something (he bought it, not I), and my new Canon S3-1s (http://www.steves-digicams.com/2006_reviews/s3is.html). I like my cameras to contain as few proprietary ancillaries as possible, so I look for AA-size batteries, Compact Flash or Secure Disk (SD) memory cards, etc. My Fuji and Canon both use AA's and widely available memory card formats. My wife's untracompact has proprietary lithium-ion batteries, but that's almost a necessity in the very small form factor. I also tend to focus a lot less on megapixels, and much more on lens & sensor quality, while keeping desirable features in mind. It's much smarter to trade off a few megapixels in theoretical resolution for a better lens with a sensor large & fine-grained enough to capture that resolution. I'm extremely happy with the S3-1s, the pictures have turned out excellently, while the zoom and macro modes have just blown me away!
A lot depends on your budget - if you have the money (about $400 U.S.), you'll be hard-pressed to ever need all the features and performance Canon packed into that S3-1s. Their older S2-1s, which is almost as good, is now selling at about $300 U.S. For budget beginners cameras, you can't go wrong looking at either the Canon Powershot A430 (4 MP) or A530 (5 MP) (http://www.steves-digicams.com/2006_reviews/a530.html), both available at well under $200 U.S.
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