I recommend the new Olympus with the 10x optical zoom (has 3.2 megapixels).
Two years ago, I bought an Olympus C-700 with 10x optical zoom at 2.1 megapixels, and I love it. More camera than I need, fully automatic AND fully manuel, depending on what you want. A bit hard learing it all, but you don't need to to use it.
The best part is the 10x optical zoom, which is rare. (Don't be fooled by a high digital zoom; a digital zoom merely enlarges the image by trimming off the edges, and you can do the same on any computer image program like Photoshop or Paint). But a high OPTICAL ZOOM gives you great flexibility.
My Olympus takes great shots at 2.1 megapixels, but now they've got a 10X opitcal zoom camera at 3.2 megapixels. Should be great. Mine cost about $450 on ebay.
I'm a Nikon guy, but the Olympus cameras are very good. I'm about to the point of stepping up to a higher quality camera (4 to 5 megapixel), and haven't ruled out the Olympus.