I have a Casio QV-3, 3Mpixel. It's small, reliable and has some advanced features you might expect on a SLR. My only problem with it is that the software is very buggy. However, Windows XP has a builtin driver which works great, and I use that since I upgraded.
I hook it up to the PC with a USB cable.
I always download my pics to the computer, then take the ones I like to Boots on a CD to get them printed professionally.
