[jkeyzer]

I am a huge fan of the Sony DSC-S50. It is last year's model so you may be able to find it cheap/used. It was around $500 when new a year ago. It is 2.1 megapixels and will do macro shots down to 3cm. It has a rechargable lithium battery (>120 minutes use on a full charge) and uses USB for file transfers. I have had mine since last summer and I love it!

The only thing you may find annoying is the lack of a viewfinder (LCD only) but once you get used to it you'll never miss not having the viewfinder except when taking pictures in the dark.