The first thing is your budget. That immediately defines a range of parameters that can have a huge effect the type of camera that can be purchased. An unlimited budget can get some gee-whiz stuff; a more moderate budget makes it necessary to shop more carefully and consider some creative options. Once a budget has been defined, the process of choosing a camera begins. Digital Photography Review has a Digital Camera Comparison page that can help the prospective buyer make a choice. However, be prepared this site asks questions that the first time or novice buyer may not can answer, but it does give great insight into the complexity of a camera purchase.
Part of the process of buying a camera is choosing a place from which to purchase it. I am a huge fan of pawn shops, though one must be careful when shopping. I have also purchased a lot of equipment on eBay. In both instances make sure to compare prices. I have seen items bid up on eBay to a price exceeding full retail. Some few get sucked into the illusion that things are always cheaper on eBay or other such sites. So it is important to shop smart and make no assumptions. My favorite pawn shop in Houston is Pawn One. They keep clean shops, have most times provided great service and have always offered a modest guarantee - basically that whatever I purchased works. Some few months ago I purchased a nice Lumix digtal camera for my mother for about $75 that she has thoroughly enjoyed. My preferred online sources are Adorama and of course Amazon. Of course many of my Adorama purchases have been through Amazon, but both have proven reliable and reasonable.
A bit of caution in the budget thing - you can purchase a digital SLR kit for less than a $1000. However, that is only the beginning. Unlike simple point-and-shoot cameras, the accessories for a DSLR can add up very quickly. If the plan is to build a system and expand your budge to accommodate that, then a DSLR may be the right choice. But if that $1000 is the ceiling, then give some thought to other options.
The next step in the process is choosing the camera. This step is the most difficult - or can be. I personally think it is easier to purchase an advanced amateur or professional level camera than a point-and-shoot camera. There are so many from which to choose with so many features. The best and safest advice I can give here is to review the link digital camera comparison link, talk to friends, visit a camera shop, and research online. I will address some issues I am most often asked:
Resolution: A 3 megapixel camera would likely be sufficient for 99% of what the average amateur photographer will do. There are pro cameras that are 4MP-5MP. Sensor, processor and lens quality are ever bit as important as resolution. Don't be misled that just because a camera is 8-10MP's that it is a better camera. I have an 7 year old Kodak 1MP digital that produces nice 8x10's - not professional nice, but family and friends nice - good enough to hang in the family room.
Zoom: Optical or Digital Zoom? Always opt for an optical zoom if image quality is important.
Brand: Many folks are brand loyal either swearing at or by one brand or the other. The fact is that some of the world's finest photography has been captured on everything from the top names to no-names to home-made. That said, staying with known brands is a safe bet. Canon, Nikon, Fuji, Kodak, Sony, Olympus, Mamiya, Pentax, Leica - to name a few. Certain brands cost more and often justifiably so. Some brands only offer high-end equipment. Shop for features, future use, and compatibility. Compatibility can be important when it comes to computers. Some brands may not sync with Apple Macintosh using native software. Others may not be compatible with printers or other devices.
The camera you purchase will be the result of many things including price, features, warranty and image quality. Your choice will be influenced by use, friends, reviews and your budget - to name a few. The following are a few things to consider:
Viewfinder: many point and shoot cameras use only a screen now. Make sure it is bright and clear when used outdoors and in. In the store the screen may look great, but outdoors the bright light can make it all but impossible to view. If possible try it in bright light; if not get an assurance it can be returned if found unusable.
Image quality: Good images are not simply the result of the camera. Someone may complain of poor prints or poor screen quality. A constant problem for me is making sure that all those that view my images are viewing them at similar settings. Make sure monitor settings are correct. I find that many cut brightness by as much as 50% due to glare when using word processors and spreadsheets. That setting is death to images. Some monitors are just not good enough. Studies have shown that most print complaints are the result of incorrect monitor set-up by the owner. Find a quality printer. A good shop will have trained personnel and reliable equipment that is regularly calibrated. Still, some employees may change the settings to accommodate their personal tastes making images warmer or cooler than the correct settings. The camera is not always the problem, though some brands tend toward certain color and contrast settings.