For a budget digital camera <$200, I'd probably go with the
Panasonic Lumix DMC-LZ8. Available for
$100 USD here (in black only; $120 in silver
here or
here).
This camera has received extremely positive reviews from
experts and
users alike.
Other good options <$200 include the Canon PowerShot A590 IS and the Sony Cybershot DSC-W120.