I just purchased a Canon Power Shot A570 iS 7.1 MP camera on eBay Wednesday for $76, and I found a sale on Canon’s homepage for the matching housing for 99.99 (reg. $240). I got the housing in today, and hoepfully I’ll get the camera today or tomorrow. Now I have to make a tray and flexible arm for my slave strobe. Any of the Canon Power Shot cameras would be a pretty good choice since Canon makes a housing for just about all of them. If you find a camera you like and the housing, check the depth rating. A few of Canon’s housings are only waterproof casings and are rated to only about 10 feet.
Also, once you get your power shot, you may want to go to http://chdk.wikia.com/wiki/CHDK and check out a firmware enhancement program that you load to your memory card that will enhance the functionality of your power shot.