I just got a new Canon Powershot (A530 I think)and it's been easy to use and my photos turn out pretty good. I like to use the Lithium AA's myself since it's easier than recharging.
I bought a 1G memory card (so I could take videos) for only $15 on newegg.com which is about the same price as a 256k at Target.
My friend is in love with his Kodak Easy share.
Probably a 5MP would be good for you. Pricing can change quite a bit depending on the size of the LCD screen on the back too, so know how big or clear you want it to be.
You're welcome to PM me if you'd like to see some samples of what my camera has taken in different settings (I take pictures at concerts, so generally bright and flashing lights and lots of movement).