canon powershot G2 is a good choice. kind of expensive though, $1,299+tax. but this is a really good camera. good for advanced amateur or professional beginners. very easy to control and have all the tools you need to take a professinoal level photo. it gives you a good hand feeling as well. when it comes to digicam, i don't want it to be too small.
if u have a optical camera, u can choose camrecorder. JVC is cheaper but not good enough. JVC have more models. SONY is expensive, also no good resolution, but high quality. Panasonic a little cheaper but not too many models u can choose.
For digital camera, the only advantage is u do not need films, i think. a good one also cost more than $500. For family use, u should buy a optical camera.