The following options seem like they should work for what you need. The third is probably best of the lot.

1) Canon PowerShot SD800 IS with 7.1 megapixel, x3.8 optical zoom and image stabilization.

CNet says about this camera (See full review at http://reviews.cnet.com/digital-cameras/canon-powershot-sd800-is/4505-6501_7-32069607.html )

"The good: Good focal range for lens; quick performance; optical image stabilization; attractive design.

The bad: Few manual controls; extremely noisy photos at ISO 1,600.

The bottom line: A slim, stylish body, a wide-angle lens, very good photo quality, and snappy performance make the Canon PowerShot SD800 IS a great point-and-shoot."

Available for $120 at http://www.amazon.com/s/?ie=UTF8&keywords=canon+powershot+sd800is&tag=googhydr-20&index=aps&hvadid=3987283405&ref=pd_sl_je3l7ynu0_b

2) Canon PowerShot SD1000 Digital ELPH with 7.1 megapixels and x3 optical zoom

CNet says about this camera (See full review at http://reviews.cnet.com/digital-cameras/canon-powershot-sd1000-digital/4505-6501_7-32314638.html )

"The good: Excellent image quality; solid build quality; speedy performance; optical viewfinder; face detection.

The bad: No manual exposure controls.

The bottom line: Small size, excellent image quality, and a solid, though not extensive, feature set make the SD1000 a great choice for a compact camera."

See pricing from $189 at http://cameras.pricegrabber.com/digital/Canon-PowerShot-SD1000-Silver-Digital/m33724726.html/search=Canon+PowerShot+SD1000+Digital+ELPH+%28Silver%29/st=product/sv=title

3) Canon PowerShot SD1100 IS with 8 megapixels and x3 optical zoom and image stabilization.

CNet says about this camera (See full review at http://reviews.cnet.com/digital-cameras/canon-powershot-sd1100-is/4505-6501_7-32826179.html?tag=mncol;lst )

"The good: Great image quality; minimal shutter lag; speedy performance; optical image stabilization; face detection; optical viewfinder.

The bad: No manual exposure controls; slow flash recycle time.

The bottom line: Canon's SD1100 IS adds optical image stabilization to last year's hit SD1000, while delivering just as impressive image quality."

See pricing from $165 at http://cameras.pricegrabber.com/digital/Canon-PowerShot-SD1100-IS-ELPH-Silver/m61940634.html/search=Canon+PowerShot+SD1000+Digital+ELPH+%28Silver%29/st=product/sv=title

One of the best digital economical digital cameras you can purchase that cost below $400 and is very easy to use is the Sony Alpha A230L 10.2 MP Digital SLR Camera with Super SteadyShot INSIDE Image Stabilization and 18-55mm Lens by Sony. According to one Amazon review from By Patrick Nguyen Trance Music "it's very fast, nice and small, obviously cheap, and very easy to use".
You can purcase this camera from www.amazon.com from $350.00
Here is the link to the camera
http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Dphoto&field-keywords=Sony+Alpha+DSLR-A230+%28with+18-55mm+lens%29+&x=14&y=22

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It has everything that you need to get great shots out of it, without the high price tag or a bloated feature set. I'd definitely recommend it. It's not the best, technically, but it's a great learning tool, performs well under stress, and an expert can get great shots out of it across the ISO range and in all lighting conditions. I would say that this will become legendary for its value as a DSLR. It's the closest thing to a "throw it up and shoot" cheap little box film camera that you can get in a DSLR. But it still takes great photos, it's very fast, nice and small, obviously cheap, and very easy to use.
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Information quoted from http://www.amazon.com/Sony-Digital-SteadyShot-Stabilization-18-55mm/product-reviews/B0029U0WWU/ref=sr_hist_5?ie=UTF8&showViewpoints=0&filterBy=addFiveStar

This dslr camera was voted as one of the Best entry-level digital SLR cameras in this www.cnet.com article.
Here is a link to the article
http://reviews.cnet.com/best-prosumer-dslr-cameras/

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Product Features

* 10.2-megapixel APS-size CCD image sensor for ultra-fine detail
* Included SAL1855 18-55mm standard zoom lens
* SteadyShot INSIDE in-camera image stabilization; Eye-Start Autofocus
* 2.7-inch Clear Photo LCD Plus display
* Compatible with high-capacity Memory Stick PRO Duo, Memory Stick PRO-HG Duo and SD/SDHC media (sold separately)

Technical Details

* HDMITM terminal with BRAVIA® SyncTM compatibility
* 2.7" (diag.) Clear Photo LCD PlusTM display
* Super-quick AF response to catch the perfect moment
* Up to 2.5 fps shooting while using the optical viewfinder
* Dynamic Range Optimizer enhances exposure and contrast
* Built-in pop-up flash and integrated accessory shoe
* Advanced Anti-Dust Technology keeps imager clean
----quote----
Information quoted from http://www.amazon.com/Sony-Digital-SteadyShot-Stabilization-18-55mm/dp/tech-data/B0029U0WWU/ref=de_a_smtd

http://ecx.images-amazon.com/images/I/41LLdGAggiL._SL160_AA160_.jpg

These Samsung cameras are great and user friendly. I have pasted a link to website with great price and service. Hope this helps.

http://www.newegg.com/Product/Product.aspx?Item=N82E16830144192

Nikon D40

You can get a great camera at a reasonable price by picking up the last of the first generation of digital Nikons. The D40 has recently been discontinued so you can get it at bargain prices. It is top-notch Nikon quality, and easy to use. Plenty has been written about it on the web.