Depends on what you want to do with it. I'm a graphic artist and at work have had a nikon coolpix 5000 for 3-4 years. Paid $1000 for it, and you can now get them for about $350. You can step up to an 8mp camera that will allow you to change lenses and do a lot of the stuff manually (focus, f-stop, etc). For my personal camera I bought a Coolpix 4000 4mp camera that is the size of my cell phone. I can put it in a case on my belt or slip it in my pocket and never know its there. I acually use it a lot vs the bigger cameras which are bulky and you're afraid to take to some places cuz it will get damaged or its just a hassel.
Megapixels are way overhyped. Most people don't need anything more than a 3mp camera. A 3mp camera will give you very good quality 8x10 prints. The only need for higher mp is to print 16x20 photos or when you're shooting something that will be printed on a brochure or magazine.
For good quality prints at the local drug store or off of a photo printer you need an image that is 150 dpi. At 8x10 that is 1500 x 1200 and that equates to 1.8 megapixels. A full page magazine add needs 300 dpi so it its 8.5x11 at 300 dpi (3300x2500) = 8.4 megapixels. Remeber, your screen is only 72 dpi on your computer.
The keys to get a good quality camera at a reasonable mp. Its better to get a high quality 3mp camera with a good zoom, than it is to get a cheaper 5mp camera.
