My mother has wanted a digital camera for some time. She primarily wanted one for taking shots of her granddaughter. I think she became convinced that digital cameras are a) not as scary as all that and b) capable of perfectly decent print quality. In fact she's pretty good with trying technology - she has a PC, uses e-mail and the web... reasonably basic, but she's prepared to give new things a go.
On Saturday we went out to Lakeside shopping centre. One of the things my mother wanted to do whilst I was with her was to look at cameras. She'd saved some money to get one, although I had to point out that you have to account for memory cards in the initial outlay, so she didn't have quite as much as she thought she did to spend. I'd already determined the following criteria for helping us to decide on an appropriate model:
1. Ease of use. It had to be point-and-shoot, and make as many of the functions as easy to use as possible. Knowing the kinds of options available on cameras these days, I didn't think she'd ever use all of the functions anyway - so the basics had to be straightforward to use and understand.
2. Large screen. I was aiming for a 2.5 inch screen, since I knew larger would be better - my mother's eyesight is OK right now, but I still didn't want her squinting at a smaller screen. She's seen other cameras with big screens, too, and liked those. Of course, the larger the screen, the shorter the battery life and the more expensive the camera, so I knew this might lead to compromises.
3. Good quality images. I'm not fooled by the megapixel myth and know full well than more MP alone does not make a sharper image, but I was still thinking in terms of 5MP so that she could make some decent-sized prints if she took photos that she liked.
4. Not a Sony. The reason? Simply, the memory sticks. They cost more than SD / CF, for no appreciable reason. In terms of other brands, ideally a Canon, Nikon, Fuji, Olympus or some similar quality, well-known manufacturer.
My ideal for a digital compact would probably be a Canon Ixus 750, but that was substantially beyond our price range. We took a trip to Photo Optix, which is where I bought my Canon EOS 350D last year. The lady there was happy to discuss the requirements, and let us play with a Nikon Coolpix of some description (right price, but 1.8 inch screen, 4MP - so not ideal), and a Pentax Optio S55. I'd not considered a Pentax, and didn't know much about the Optio range. It did fulfil all of the criteria. Before we purchased I dashed out to another shop to flick through the camera magazines, and the model got a reasonable review - no major flaws, and good quality. Photo Optix also did a case, batteries plus charger, SD card and 3 year warranty for half price, just exceeding our budget but working out pretty well.
The only issue I had with the camera was that the PC software didn't seem particularly friendly to beginners - it ships with a copy of ACDSee for Pentax. I'll look around for something a bit more straightforward to use, ACDSee seemed to expose more options than strictly necessary. I'd be interested in anyone else's experiences with this software.
Anyway... choice made, and so far, so good. We'll have to see how she gets on with it.
 the Photo Optix website really needs some love, compared to retailers like Jessops or Warehouse Express. One thing I will say for them is that their staff have always been very attentive, helpful, and knowledgeable. Prices on memory cards are not very competitive, but in general I've been happy with their service so far.