Canon G9 would fit your bill, seems to run about $400-425
good resolution, i know from other people in photography that's it's impessive for a point and shoot camera.
for the people reccomending SLR's- don't go there
the learning curve between P&S and SLR is great, many people who buy SLR's never take their settings off auto, making the purchase of these cameras basically useless. they are advanced level cameras specifically designed for the users to manipulate the light around them to make the best image to their specifications, the majority of people who pick up cameras, do not need an SLR. plus he doesn't want to spend loads of money.