The Canon PowerShot A480 is a very good and affordable compact digital camera for beginners. It has a 10 megapixels sensor (which is more than enough), a 37-122mm (35mm equivalent) lens which is capable of doing close (1cm) macro shots and a flash. As the A480 does not have a viewfinder, taking pictures and navigating the menu are done using the 2.5" LCD. The camera has 15 shooting modes (Auto is fine most of the time), automatic red-eye removal and a special feature called face detection which identifies all the faces in the photo and make sure they appear natural in the resulting picture. This Canon also shoots VGA resolution videos at 30fps which is great for a compact. The A480 lacks some features, e.g. manual override, but the A means amateur after all...

The Canon Digital IXUS 110 IS (called the PowerShot SD960 IS elsewhere) is an excellent compact camera with a metal casing. The IXUS 110 IS has a good 28-112mm f/2.8-5.8 (35mm equivalent) lens and, combined with its 12MP sensor, can be used to take great pictures. Like most Canon compacts, this camera lacks an optical viewfinder but has a decent 2.8" (if somewhat smallish) LCD to compose shots on and to navigate within the menu. This Canon can also record video at 1,280 x 720 at 30fps which is HD quality in my books. One can then watch the video in glorious HD on an LCD TV (say) through the HDMI output of the camera. The Canon Digital IXUS 110 IS is a great all rounder: it takes excellent pictures, has a quality lens and records HD video. Recommended.