Let's start with the most common question I get from friends: are under-$100 digital cameras any good?

The answer is simple: no. Anything in that price range is a toy and, in my opinion, not spending on. The image quality sucks, and there are so many compromises that there's really nothing good, other than having a novelty item. I would STRONGLY not recommend it. You can get a good digital camera in the range of about $250-$400, but below that, in my opinion, you're just wasting your money.

That said, digital cameras are a lot of fun. I've personally held off buying a high-end one for myself. I'm a photographic artist (you can see my work at http://www.gewirtz.com) and I demand very high image resolution, very fast shutter times, and interchangeable SLR (Single-Lens Reflex) optics. These features are definitely available in professional digital cameras at prices above $2,500, but I just haven't seen the need, yet, to get rid of my trusty old Nikon film camera for art shoots. In concert with the 35mm film camera, I use a negative scanner, and can then manipulate my images in Photoshop very nicely.

However, I also have a $300 camera that's great for snapshots, fun pictures, and eBay stuff. The nice thing about the digital camera is you can reuse the "film", very quickly get a preview of your pictures, and send fun snapshots to your friends. When I moved, I took pictures of the new layout here and sent it to my friends to see. That was incredibly easy with the digital camera and something I wouldn't have done, had it been necesary to wait for film processing. If you're thinking about getting an inexpensive ($200-$400) digital camera for snapshots or eBay postings, I think you'd enjoy it, maybe send pictures to your friends and family, and generally have a good time with it.

Think of the sub-$300 and sub-$400 digital cameras as exceptionally nice Instamatics, and the ones that are $700-$1,500 as appropriate for the more descerning amateur, and those from $1,500 up (and they go way up) as professional grade. The more costly ones are also much more of a hassle to deal with; they're heavier, require much larger memory cards, and are not something I'd recommend at all unless you're a pro. You'd never see the benefit.