CDN $1,000 seems a very decent amount to get a fairly good quality camera. You will be well-advised to invest a few minutes to read this response to get the most bang out of your bucks. My response is based on several factors:
What will be the camera used for?
First of all, consider the purpose of the camera. Just sinking 1000 dollars is very good, but if you have a good idea on what the camera is to be used, that will be a big help in making the decision.
- Will it be the first digital camera for the user?
- Is he an experienced user and is now getting a new upgrade to a better model?
- Is he a sort of professional photographer, who just can not compromise on the quality of the picture?
- Or, my favorite category, which is “Prosumer” - those people who are fairly knowledgable and experienced in digital photography and want a camera that can go from point-and-shoot to advanced manual settings and allows them to get great pictures, without a huge bulky thing to carry around?
My remaining recommendations are assuming a “prosumer”, which means a sophisticated user who wants consistently high quality pics without breaking their wallet.
Should we buy a Camcorder+DigiCam rolled into one?
Personally I don’t think the convergance of camcorder and digicam is terribly successful at this point. My camcorder can take still digital pics and my digital camera can take video clips. But, I’d rather use camcorder for video and digicam for still pics, because that is what they do best. A high quality mix of these two is still very expensive, and so still pics taken by camcorder are of poor quality compared to decent quality digicams, and video clips shot by digicams are just a nifty feature which you really don’t want to use unless you absolutely have to.
Are brand names important?
Coming back to decent digital cameras, I’d stick with some known brand names, rather than those names which are not really known for producing high quality digital cameras (so, Casio is out!). Stick with Sony, Canon, Olympus, Fuji, Minolta, Nikon and Kodak. They produce some of the highest-rated cameras. This decision impacts the quality of the lens which, to be honest, is the most important part of the whole deal.
How do the cameras store the pictures?
Sony digicams store pics in either memory sticks (which is good if you use other Sony products like laptop, CLIE or printers) or they use small CD-R. All other cameras use a variety of storage devices, including Compat Flash (cheapest), Smart Media, Multi Media or Secure Digital (most expensive). Since all these media are re-usable, so you don’t have recurring costs for them.
Oh man, the batteries are running out!
Most new cameras have rechargable batteries, and even if they don’t, you can always invest in rechargable batteries and a charger to save yourself from battery-woes (digicams are notorious for draining batteries). Kodak has the best solution, where their docking stations recharge the batteries and also allows you to transfer the pics to your computer.
Transfer to PC - what a chore!
On to transferring pics to the computer, Sony’s CD-R are pretty easy to transfer too (as is obvious), and you can get Card Readers for almost all media types. As a default alternative you can connect the camera to the computer and most new models have Auto Connect USB, so you don’t have to install any software.
Enuf Already! Talk about the cameras, will ya?
Now to the quality of cameras. Result wise all cameras are good. If you really want to go high-end then you don’t want to look into Minolta DiMage X (US$349) which is very handy with a unique design. Since the lens and the reflectors are inside and are angled in, so the quality of the pics is not a perfect 10. I use Olympus C-700 UZ (street price US$599), which beats the crowd in its monster zoom (10x optical and 27x total). No camera in its price range beats this. Its newer brother C-720 UZ has 8x optical. When buying camera, you will often hear two terms very frequently. Resolution (Mega Pixels) and Zoom. The higher these two the pricier the camera will be.
The Mega Pixel Business
Unless you are a professional photographer, going for more than 3 Mega Pixel is probably going over board. A 3 MP pic can be enlarged easily up to 8x10 inches print, which is more than enough. 99.9% of pics taken by digicam are only used online where 640x480 is the best resolution if you want to share via emails. Even 2 Mega Pixels with 1600x1200 are good enough for details and allows you to crop to get the desired part of the pic without compromising the quality.
What a Close-up … the Zoom thingie
When talking about zoom, I mentally always discount the digital zoom, because digital zoom is created by using the pixels and thus renders the picture grainy. So generally only the optical zoom is most used. Optical zoom is created by movement of the lens and allows very sharp pictures.
Lights! Camera! Action!
The flash of the camera is also very important. Olympus C-700’s flash is good for 15 feet, which is nice cz you can’t use the zoom in the night if the flash is not going to support it. Some high-end cameras also allow you to add-on external flash.
Add-On’s
High-end digicams allow you to add lens and micro-filters to the camera, which is good if someone is really into photography. WideAngle lens and Telephoto lens can really come in handy in some cases. hint hint 
Camera Recommendations
I am partial to Olympus, so I will recommend checking out the C-series of Olympus C-700, C-720, C-3020. All are pretty similar. If Zoom is important for you, go for 700 or 720. 3020 is an alround excellent choice. Or if you really want to spend some serious money (but stay within 1000 bucks) go for C2500 SLR or C-2100 UZ. They are bulky but full of features. Extremely great results.
Sony is excellent, although are pricey in their range, because their storage media is dirt cheap. We get a 64MB Smart Card for 40 bucks and we can get a CD-R for many times that capacity for 69 cents. So they charge you upfront for that feature. With deep deep discounts (as hskhan) mentioned, they might be more reasonable.
Kodak has some wonderful cameras. They don’t look as glamorous as Sony or Olympus but they do produce great results.
Minolta DiMage 5 or 7 are really really high end cameras with so many features to make your mind go numb. Since they are around for some time, so you can get good deals for them too. Their newest is DiMage 7i which is probably more expensive. With these cameras you will never run out of features, thats for sure.
Fuji’s Fujifilm FinePix 6900 Zoom and 6800 are highly rated. Fujifilm Finepix F601 Zoom is Editor’s Choice in this month’s PC Magazine. There are several good reasons for that. Check out the magazine’s complete feature article and comparisons to find out more.
Nikon Coolpix 2500 is probably low-end compared to what you are looking for but it has a nifty design which is quite earth-breaking. Great pics without breaking your wallet.
Canon PowerShot S40 and Fujifilm FinePix S602 Zoom are for some serious digital photography as they are in USD $1,000 range. You probably don’t need that.
Buying Tips
Don’t buy a camera over the internet before actually holding it in your hands. First drive down to the biggest electronics store in your area and actually hold each of the recommended camera in your hands to get a feel for the gadget. And at the same time, get an idea of which one fits your price range. Don’t buy.
Come back home and read reviews of the camera you liked. Good review sites are aplenty on the internet. The one I use most is Steve’s DigiCam Reviews because this guy is very thorough. There are some other sites too.
Once you have made up your mind, then go on the internet and find comparative prices. Yahoo! Shopping does a good job in getting you prices from different vendors. You have to find a vendor whose price is not too low to be true, and who is willing to ship to Canada (or is Canadian based). Check the ratings of the merchant before clicking “Buy Now”. Sometimes you get terrific bargains on the net (always buy new, though, not refurbished or used) as they eliminate all the overheads of maintaining shops. For a $600 gadget, I once got it on the net brand spanking new for $310, and that was not an auction. It was a regular shop.
Otherwise, just drive down to a smaller camera shop and haggle for a good deal. Big stores don’t give you discounts, unless its advertised. Small stores may give discounts to sell a high-end camera.
While buying the camera, also buy the critical accessories (storage media and rechargable batteries if not already provided, and a camera bag). Tripod and additional batteries is something you can buy later on, if required.
So, here you go… complete guide to digital camera purchase. Enjoy! 