I've got a Vivitar 8.1 megapixel digital camera myself. Very easy to use and takes fantastic pictures. Not to mention I can upload the pictures on-line to Walgreens and pick them up later the same day.
I bought the Canon 20 D for Christmas. Got the 1.4 lens. My old Pentax ME is officially retired.
I spent under $80 on an HP Deskjet 5440 and I use their software to edit my photos. I used to use yahoo to print my digital pictures and mail them back to me. I had pretty good results from them. Now I just do it myself (admittedly, it is a little more labor-intensive but the results are just the same).