Theres a plethora of Digital Cameras on the market today. Most popular ones being Sony, JVC, Olympus, etc. The most basic considerations when you want one can be put under these headings. Firstly, the use for the camera( I mean - Real Practical Use, theres no point in saving money and getting a camera that you dont use!!). Secondly, the features you need ( and the features the camera offers), lastly, money.
As everyone knows Digital Cameras have their rating in MP(Mega Pixel). A pixel is the basic unit of a digital photograph. Thousands of such tiny dots make up your picture when you take one. The costs between cameras vary on this factor. Typically, you should be getting good photographs from 3 MP onwards. A 4.5 or 5 MP camera is perfect for a good shot. You can also use that for your normal photo print (if thats all you intend to do with a camera). Note one thing though. Though the camera will say 6MP or 8 MP, theres a hidden factor called Average Pixel count for all cameras. Its the same logic as bikes. When you say a 100cc bike you dont get 100cc , but 95 or 98 cc. its an approximation. Because out of 8 Million pixels, some pixels will be bad, etc. This is normal. The other issue to consider is whether the capturing device is a CCD (Charged Couple Device) or a CMOS (Complementary Metal Oxide Semiconductor) chip. Normally CCDs are used by expensive cameras as their quality is good. but CMOS cameras also are there in market and they are economical, but quality varies. To be clear, CMOS chip cameras are the ones the cell phones use, they are .5 MP. Also check on the special features each model will give. Another thing thats in the news is the RAW format. This format applies no compression to the pictures (unlike all formats where a lot of compression is applied).The advantage is that you see the picture as the camera took it. No details are lost. Most cameras of today will support the RAW format. Lastly, check you budget, as thats where it all hits hard. I think you should ge t a decent one in the range of 8500 onwards. I think a Sony is a good option. Especially the DSC series, for people who are not that photo-savvy. Olympus is also a good alternative.
I would prefer a manual camera, that allows you to change your shot in your own way.