First question... What do you want to do with the pictures?
If your only goal is to email them and post on websites, then low resolution is fine (1MP and even lower). You can get such cameras for well under $100 today.
If you wish to print your pictures, you need to go higher.
For 3X5 you need at LEAST 1MP
for 5X7 at least 2MP
for 8X10 at Least 2+MP (but may want to consider 3MP or 5MP at that size)
Figure such cameras will run about $150 per MP (sales and specials notwithstanding)
Your next issue is make. My recommendation is to look at the Olympus or Nikon line of cameras. I've not seen consumer digital cams that have better glass lenses than these two makers.
Lastly is support equipment.
Your camera will come with a very small memory card. Get another card, the largest available (64MB or 128MB, typically)
Batteries: Get rechargables. I recommend the MaHa NiMH 1800mAh. You can get a set of 4, with charger for about $35 then get a second set of batts. Don't waste your time/money on alkalie batts...
Printer: If you are going to print your pix and want them to look good, make sure you have a photo quality printer and that you use photo paper.
that's the short of it. if i think of anything else, i'll drop another 2 cents