Hi Jennifer,
I have a Canon SD850 IS (can be had on eBay for about $125) with the canon housing ($170). I can’t speak highly enough of this camera. For an amateur like me who just likes to remember what I’ve seen and to take shots of the kids while diving, it is the bomb! Whatever camera you decide upon, while the ’underwater’ mode is nice, it isn’t the end all at all depths. I’ve shot from the surface down to 110’ (garden eels) and you _must_ have customizable white balance for both shooting and video (if you like video.) In fact, if you have good white balance settings, you won’t (for the most part) feel the need for an external strobe. In good sunlight, the white balance correction will be far more interesting. If you’re doing macro and more dramatic shots, or night shots, then you’ll appreciate an external strobe. However, the built-in flash (ignoring other built-in issues) is quite bright and you’ll enjoy learning to use it without the expense of an external strobe. As for shutter speed lag - this is an issue, but, you can significantly minimize it by half-depressing the shoot button and then press all the way at the desired moment - there’s still a bit of lag, but not enough to eliminate some great shooting on your part. Finally, if you really want to squeeze every drop out of your Canon, take a look at this http://chdk.wikia.com/wiki/CHDK - I use these extra features a lot, especially while diving as it gives you fine control over shutter speed, and other nifty features such as raw files and more. It’s pretty advanced (even intimidating) but take some time and you’ll appreciate the extra options. Finally, take the Digital Photo specialty. It’ll make your photos 10 times better! Really! The rather simple ideas and tips go a long way toward better underwater photography.
Have lots of fun, cause if it ain’t fun, it’s just another chore.
Kevin