One thing to not skimp on is the lens. You will find better quality lenses on the Nikons, Sonys, Olympus type cameras. I am not impressed with the lens quality on the cheaper Kodaks - the more expensive Kodaks (like Brain's) are better.

You could put a $150 Nikon up against a $150 Kodak and see the difference if all other options (zoom, pixels, etc) were the same. I have done it with a friend's Kodak vs. my Nikon.

Brain is right about digital vs. optical zoom. I do not care how much digital zoom there is, it is all about the optical. Digital zoom tends to compromise photo quality.