I highly recommend the Canon Powershot SD line. I've had one for years, and it's been great. My wife got the 'SD1100IS' (http://www.amazon.com/Canon-PowerShot-SD1100IS-Digital-Stabilized/dp/B0012YC7AE/ref=sr_1_1?ie=UTF8&s=electronics&qid=1235748290&sr=1-1) model last year, and it also takes fantastic pictures. I've recommended them to friends, and everyone who has bought one loves it. It's shirtpocket small, but has great optics and firmware; the pictures are generally outstanding. I've had photography snobs see my pictures and be wowed, then try to start a conversation about what kind of fancy gear I used. When I tell 'em it was just a little pocket point-and-shoot camera they look startled and change the subject. Battery life is very good (obviously longer if you're not using the flash), but get a spare battery anyway, so you can keep using the camera while one battery is in the charger. And of course, get a big SD card or two (8 GB cards have come way down in price, and hold a ton of photos). Oh, and get one that has an actual viewfinder window, in addition to the LCD screen. You might not use it often, but there are times when it comes in handy.
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