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I got my wife the Minolta DiMAGE S414 camera (about ($349) and a Canon S9000 photo printer (about $200) for Christmas. The pics that come off of that printer as almost as good as the ones we get with our good Minolta 35 mm that we have, and when I say "almost as good", I mean, it's extremely difficult to even tell the difference.
When I looked for online opinions of cameras in the price range I wanted to spend (less than $500) the Minolta won out. The only knock I read against it was battery life, but I have not found that to be the case with ours. I bought 8 nickel-metal-hydride batteries and a charger, and although we've probably taken about 100 pics, we're still on the first four batteries.
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