first you have to decide if you want a larger camera that will most likly have more features, well maybe not that much more, but probally have more zoom. I have a oly 5050 zoom. its 5 mp and long been discontinued. its awesome, but this is moot you probally cant find one, if you can get one, it has one of the best lenses you can get on a digital camera, even now, I bought it 5 years ago. well its a little big and we wanted something a bit smaller. we just picked up a canon sd630, its fantastic, I always liked the digital elphs. my step brother had one at christmas and we had to get one. its 6 mp has 3x zoom, standard for a small camera, and heres the big thing, its got a 3in lcd. that was the kicker its terrific, taked great pics also and has almost all the features my oly has, and that was 800 when I bought it. I highly recommend it if you can find it, there being clearanced at the moment, have no idea why either, I dont believe any of the other canons have the 3in lcd. you will go into the store and be dazzled with 8 and 10 mp cameras, dont buy into it. unless youre going to be making posters your just spending more money. even 3 or 4 mp makes great 4X6s. 5 will go to 8X10 barly I think and 6 is fine for it. the fact is you really cant find a camera now adays thats under 5mp thats not a total budget piece, so you sould be good with just about anything. Id definitly stay away from HP, there not so good. stick with olympus, nikon or canon and you should be fine. the sonys are good, but ive never liked them. as for the editing software, spend 50 dollars and get photoshop elements and it will smoke any stock box software you get with any camera. taked a look at the sd630, if you can find one, there running around 265 clearanced, maybe less some places, you will not be dissapointed, I promise you.