Another vote for Sony. I bought the 5.1 megapixel digi this summer, and the waterproof diving case, and i have been very impressed with the picture quality and ease of use. takes cool POV pix from in or underwater, and short videos.they also have a large view screen on the back, and are small and lightweight. a couple friends plus the salespeoples at best buy all recommended sony as the best cameras (at least for the wallet sized point and shoot variety) for the money.
only drawback is the total including all the add ons (1gig memory stick, diving case, extra memory stick and batteries for roadtrips) is @ $700-800.00. at that price you could almost get a much fancier camera.... but not one that goes underwater!!! just be careful of the gasket on the case. if it gets dirty or falls apart, its no longer a good seal, and that could get expensive quick, depending on how long it is before you notice.