Camera with with Video recording.

Well, now that we know what's the priority and what your budget is, we can certainly point you in the right direction. I recommend the Canon A640. 10 MP, movie mode with sound, a 4x optical zoom. The downside is that it isn't SDHC compatible so you're limited to SD cards in the 2GB range. WHich isn't necessarily a bad a thing. Multiple cards gives you insurance against a corrupted card. But you should do that anyway no matter the size.

If you want larger storage capacity, there's the 7.1 MP Canon Powershot SD750. Slightly smaller in the optical zoom - only 3x, but you do get high capacity sd card capability. Lastly, there's the Canon PowerShot SD800 IS. It's chief advantage is image stabilization, which gets it just a tad over your budget - but certainly worth the extra few dollars.

All three are highly rated and very popular.

Now you're probably wondering why I didn't recommend any SONY products. Well, I'll be up front that my issue with Sony is their obsession with proprietary technologies such as the memory stick, their own spin on formatting, and a host of others which the Canon won't do. Thist that tends to paint their customers into a technologicial corner where only Sony based products can be used across the board. I don't like that.

Canon relies on SD cards, which are pretty much the standard in point and shoot for memory cards. This means you can use any you happen to currently have without having to reinvest in other storage cards. And SD cards are much cheaper than memory sticks. You can also use them in other technologies like PDAs, DMPs, and even mp3 players - NO MATTER WHO MAKES THEM, whereas that memory stick is only going to be used in another SONY product.