Introduction (or click here to skip all the way to the recommendation part)
For this article, I decided to stick with Canon cameras. I wish Canon paid me for all the sleepless nights I spent designing this website, but they don't. I chose Canon because they have a model for everybody's needs. I don't have the slightest hesitation about recommending them to anyone. Other brands that have good point & shoot cameras are Olympus, Nikon, Panasonic, and Casio. I would avoid Kodak, HP, Polaroid, Vivitar, and Sony.
What is really important in a point & shoot camera?
In very few instances you may be looking for something I didn't include in this list, but in general you want to look for the following:
Quality
First and foremost.No matter how good the features or reviews, or the camera itself looks, if it doesn't make good photos, you are at a loss. How do you know if you are looking at a good camera? Research, remember? Ask, or look online for people who know what they are talking about.
Zoom
If you don't have zoom, you will have to get closer/farther from the subject much more. In certain places that is undesirable (church, weddings, etc.).
Size & Weight
If you want to carry your camera with you wherever you go, this is really important. Not only you want the camera to fit your purse, but you want it to fit nicely in your pocket as well.
Price vs. Value
Don't pay $300 when you can get the same camera with slightly less features for $200
Image Stabilization (IS)
This is critical, and it means that the camera has a built in mechanism that protects your photos from being blurred if your hand shakes. And this is yet another reason why I chose Canon: 90% of teir new cameras have IS. The smaller the digital camera, the more vibration you will have in your hands. And since we don't use the viewfinder in point & shoot cameras, the farther away from your body the camera, the more vibration you will have.
What is the least important?
Megapixels
As of 2008, all point & shoot cameras have enough pixels for what even professional photographers need. I take photos with a 6MP camera, which is less than any of the point & shoot cameras mentioned on this page, and I have no problem printing 16" by 20" prints. Even if you have a camera that has 12MP, put it on 6MP, and opt for the superfine JPEG quality rather than 12MP and normal JPEG.
Canon Point & Shoot Cameras
There are four(three really, but let's keep it simple)types of point & shoot cameras that Canon makes:
These cameras are built with your grandmother in mind - Small, lightweight, easy to use, big screen, long lasting batteries (some of them even have rechargeable batteries). All models are very close together in features and quality. I would get the SD1100 because of its low price and great value.
These are the cameras you want if you are on a low budget, yet you want manual features (M, A, T, and P modes), excellent optics, lots of zoom, and all the essential features digital SLRs have, except speed.
Still more features than the A Series, yet reasonably priced. Larger, and supposedly more professional. It has a really cool LCD that you can tilt. I don't think it's practical, but hey... it rotates!
Unless you know what you are doing, I wouldn't pay more than $300 for a point & shoot. Just save $460 and get a digital SLR. These cameras are for the professional photographer who wants a small camera as a backup.
Quality - SD, S, SX, and G have the best quality. The A Series feels a little cheap, but Canon invested in the quality of the photos rather than the feel of these cameras.
Comparison (updated July, 12, 2008)
Click on the model number and it will take you to the Amazon.com page.
In the far right column I have a self-updating price watcher from Amazon, so that you can see the price in real time.
If I had my choice, I would buy a SD1100 IS for every day use, and if I were to start photography all over again, I would buy the SX100 IS.
Accessories
My principle when it comes to accessories, is keep it as simple as possible. You never know what you need until you get used to carrying the camera around. Buy the necessary accessories now, and get whatever else you need after you've played around with what you have today. The only accessory you absolutely need in order to start taking photos is a memory card and a memory card reader.
There are thousands of memory cards. You can choose one from the options below or go directly to Amazon if you click here. I have recommended the Sandisk II Ultra SDHC that comes with a USB reader, so that you don't have to buy another one separately. It also has free shipping and no tax. As of July, 2008, the price was $28 for the two items. Check it out here.
There are lots of other accessories out there, like tripods, monopods, and batteries. I will add those in the days to come.