i got a Kodak refurbished model. their website had refurbs and end of stock clearances, so it's worth a look there for a bargain. i'm pleased with my Kodak compact and it got me taking snaps again, so much so i ended up buying a dslr.
* no of pixels (more pixels = better quality photos but needs more memory) 7mp is the standard now.
* memory type SD is common but Fuji and Olympus have their own type
* battery ( custom rechargeable battery lasts longer)
* size - one for the pocket or one in a bag.
Finally, the quality of the optics makes the biggest difference.
Fuji Finepix always come recommended. I have an old one and it's always came up trumps. Panasonic Lumix seem to be building a good reputation too.
Don't worry too much about pixels. As the others have pointed out, lens quality is much more important. You only need a lot of pixels if you intend on making huge prints.
Go for simple practical features like a rechargeable battery. Fuji Finepix are said to be excellent. We have a Kodak Easy Share, which is dead simple to use.
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