I prefer the Canon SD900 with waterproof housing WP-DC7. The pictures and video that I have posted were taken with this digital camera. It is very small and easy to operate (even underwater). Given the type of diving I am involved in; large cumbersome equipment is not a welcome addition. On my profile - the cave pictures and video posted are from this camera. At that time the video and picture were taken, I was still learning how to use the camera. However, it should provide a good benchmark. You should be able to purchase both of these items form eBay for less than $400.00.
Hope this helps......Daniel