Hard to imagine that was only 16 years ago.
Going through a Comp USA I spotted a package with an IXLA digital camera, webpage and photo editing software on sale for maybe 60-70 bucks. It was .3 megapixel, plastic lens no doubt and a pretty basic point and shoot camera.
But I got it and she loved it! We had more fun with that little thing! She began taking more pics because there was no film expense and the pics were actually pretty good. On the web they were outstanding. They still look fine.
A couple of years later we got a small Fuji digital with maybe 1-2 megapixels. It was nice because it was smaller but the IXLA was still just as good.
A few more years passed and I got a Kodak 650 6MP digital for our youngest son. That is now our fall back camera. It has a decent zoom, is very easy to use and has never let us down.
Since then a few cheap digitals have come and are mostly relegated "keep in the car" cameras.
Recently Mrs p6 bought a camera on QVC. It's a Pentax but I don't recall the model. Fits in her purse and takes nice shots but the learning curve is pretty steep at least for us.
Meanwhile the Canon AE film cameras with bags of lenses, tripods and other stuff are my favs but anymore even the cameras in our phones and tablets take better pics. Plus it's getting hard to get film unless you order it on line.
When I get home I think I'll dig around and see if I can find the old IXLA. It would be a hoot if it still worked!
Using http://www.usinflationcalculator.com/, your $500 1996 camera in 2011 dollars = $716.82.