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I would suggest The Canon PowerShot A40, it is the camera I currently have and I think it is amazing there are so many options for advanced photographers and it is really simple to use for the begginers. I posted a few pics that I took with my camera, have a look, you can decide for yourself.
They have come down in prise considerably, I think they are at $329 now.
I do suggest getting NiMH batteries though, they will save you a lot of money in the long run (about $25 for four and a charger at Wal-Mart)
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Later,
Dan.
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