The Kodak Z740 is a nice low to medium priced digital camera, with a very nice optical zoom (10x) for those nice telephoto type shots. Sony also puts out a nice model under $500 with a 12x optical zoom that would be nice in and around the lake, but also would be a nice family photo taker as well, as would the z740. I look at the optical zoom, because the digital zoom can actually cause some picture quality deteriorization. I think that Fuji also has a unit under $500 with a 12x zoom. Megapixels of 4.0 to 5.0 are great for quality 8x10 (ditto with a 3 MP, actually). If you figure on doing much cropping of photos, the higher MP will allow a little more cropping and subsequent enlargement before the picture starts to get "grainy". Whatever camera you decide on, I would recommend a large capacity memory card (SD/MMC, Memory Stick, Xd) appropriate for your camera. The higher the Megapixels on your camera, the fewer pictures you can store (or video clips). I would be looking at 512 MB card minimum. The higher card also lets you take more uncompressed photos (not saved as a "jpg" file, the type of file we routinely email pictures as).
Over the $500 mark, you can start getting into cameras with additional lenses, the Single Lens Reflex digitals such as Canon's EOS and Nikon D50 or D70, or the Sony's that IG mentioned.
Digital cameras are great, just get a good quality one that fits your budget. Then get out, point it, shoot with it, and have fun with it!!!!!
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