For less than $400, i'd suggest the panasonic fz3. Its got a really nice lens and more features than I'll ever understand, but its simple enough to use.
Its gotten very good reviews at that price point.
I was looking for a camera when I saw this thread...
http://forums.pelicanparts.com/showthread.php?threadid=196537&highlight=panasonic+digital
but didn't want to spend that much money. This link describes the FZ3 and compares it with the more expensive camera described in the thread above...
http://www.megapixel.net/reviews/panasonic-fz3/fz3-gen.php