Sony gets my vote too. I've had a cybershot dscp72 for nearly two years now and it's great. If you're not planning on needing to produce poster sized prints a 3 megapixel camera is going to be enough resolution for you. I can produce super crisp 8x10's and 11x17's with it, plus it shoots video with sound at 640x480 resolution... enough to fill your tv screen. Nice.
The cybershot is a good size too, but my next camera purchase, probably not for at least two years, will be smaller... even more pocketable. I'd value portability above all else nowadays.
The only downside to Sony's is that you need their proprietary Memory Stick as well, though other companies (Lexar, Sandisk) make great, cheaper alternatives too.
No need to spend much on one... they're all pretty good if you stick with a known reliable brand name.