I've been using an Olympus D-490 2.1 mpx for about 4 years and it's big and kinda clunky, but she do take some real nice pix. Anyhoo, I just picked up a Sony Cyber-shot DSC-W30 6 mpx little feller and have been quite happy with both the imaging and video - and the super speedy USB file transfer to the PC. Sports a Carl Zeiss lens, too. I particularly chose the W30 because unlike too many other DC's, this one has a viewfinder. Got the W30 on sale last month from Staples for $160 + $30 for a 1 gig memory card. I'd recommend it, for sure.
Oh, the power supply: It's a rechargeable pack only, no standard batts, and that was an initial concern that I'm glad I got over - works fine, bought a spare that I've never had to use. On the 3 day Paradise hunt I took over 60 full res pix and never charged. In fact, since returning I dumped those images, took 4 hi res movies and another few dozen images and I'm still on that initial charge!