In my short lifespan, I've seen digital imagery grow and blossom -- and now it's so cheap and easy, they put it into cellphones as a gimmick. But should you buy a digital camera instead of a nice 35mm film SLR. My opinion -- YES! Don't get me wrong, I love film, I've shot hundreds of rolls of 35mm with my trusty Canon A1 SLR both professionally and personally. And film still has a certain warmth that's hard to find in digital. But digital has a special look and quality of its own as well. As for quality of image -- the everyday user will not (and many professionals) won't be able to tell the difference. Especially at snapshot size.

Why else is digital better than film?
No need to by film! What a savings. No need to develop film. What a savings! Beautiful color images ready for you to revisit right in the back of the camera. (They're coming with pretty large displays these days). I also love that I can fit hundreds (even thousands) of images on one memory card. Wow! I don't have to carry rolls of film on my vacation strips. And even if I run out of battery power -- I still do not lose the images. Unlike film, you can very easily upload the images to your computer for storage (this is a much better method than storing snapshots in a shoebox). You can organize them on your PC -- you can show them as a slide show easily (better than snapshots). You can easily duplicate them to disk to share with friends and family. And you can manipulate them with software products -- IE: crop them, brighten them up, sharpen them, delete people you don't like, add words. (Btw, you can manipulate photo's too -- if you have a scanner to scan them in.)

What to look for in a digital camera?
1) A big memory stick. That way you don't need to worry about running out of picture room. A 1 gig stick will be very difficult to fill --even if you're shooting video.
2) The more megapixels the better the resolution of the shot. Anything over 2-3mp is fine for snapshots, but if you plan to blow them up to 8x10 or bigger at least 5mp would be the choice. My HP is 3mp and it's 8x10's are just barely okay.
3) Video. I love the video option on my camera. I thought it would be too cheesy to enjoy -- and in fact, it's very low-fi, but this is not for broadcast -- this is a moving motion memory of my girlfriend or my mom dancing with my dad -- that I would have never captured if I was carrying a real video camera. Plus, I love that I can store it easily and organize it right along with the pictures from the same week. Some cameras have videos of better resolution -- go for the best. The Kodak's is twice is big and the audio is better too.
4) Display LCD -- go for the biggest.
5) Zoom. Optical zoom is the best -- a 3x optical should do you fine. Digital zoom is a bit dicey, but I think they're improving the quality of it these days. My HP doesn't even have a zoom at all -- and I'm still relatively happy. Nonetheless, the zoom will prove useful.
6) Battery duration. My camera takes regular AA batteries -- I have rechargeable AA's and a 15minute charger which I love. So I'm happy. But others have batteries unique to the camera that must be charged with the unit that comes with the camera. They seem happy -- but that means, unless you bring enough charged battery power for your trip -- you'll also have to bring the charger unit with you. Plus, you'll have to find a way to adapt that charger if you're going to a country with different outlets/voltage.
7) Picture Quality. I've read reviews of cameras that dissect image quality and color. I'm very image conscious, but I still think some of these guys are going overboard. Try the camera... look at the image on your computer -- if you don't like it -- bring the camera back.
8) Finger Handling. There are two things I don't like about my camera (HP Photosmart 435). The first is the one/off switch is too easily toggled when in my carrying pouch -- which means my battery may be drained inadvertently. The second, is that the placement of the lens is too close to the side, so I will often accidentally capture the tip on my finger in my photo. Make sure your fingers don't accidentally hover around the lens as you comfortably hold the camera for a shot. Otherwise -- I love the thing to death. I carry it with me constantly.
9) My girlfriend has the Kodak EasyShare V550 (Same ones the academy award Nominees got - but Costco didn't offer the diamond initial engraving) and we both love hers even more. 5 mp, video that's twice the size as mine. A huge display on the back and a sleek narrow design.
10) Quick start up. You want to be able to pull the camera out fast, turn it on and have it power up quick so you don't miss that cool thing you want to capture. A quick powering up camera will have that feature listed on the box.
11) Quick response to your click. Likewise, after power up, when the camera says it's ready to click -- it should snap that photo at the same instant you click the snapshot button. Unfortunately, many older cameras have an annoying delay between the snap and the shot. My HP has a noticeable delay. I usually end up saying, "1, 2, 3" -- but I press the button on TWO for a flash/snap on THREE and no one is the wiser.

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