Lets get the "megapixel question" out of the way first. In today's market, most cameras being manufactured have more than 6MP (megapixels). That means that you can print an 8x10 photo from any one of them. So megapixels are actually not important unless you are buying an older digital camera.
What will you be using your camera for? This is an important question to consider. Don't just choose a camera because it is on sale at Best Buy (by the way, I always recommend buying your camera from a camera store, and an online camera store is your best bet to find what you want, when you want it).
Here are some of the things to look for in your new digital compact camera:
Image Stabilization (anti-shake) will help you take clearer photos without using a tripod.
Sensor size - larger sensors record more information in the camera so that you can print better quality prints at larger sizes (this is not necessary if you just plan to post your photos on Facebook or Flickr)
Auto or Manual control - as technology becomes more intelligent, manufacturers are moving away from manual control modes. For many folks, letting the camera make all the choices is fine, but it that you?
Face Detection is becoming more common and even multiple face detection is now available on many models.
Optical Zoom - every camera has at least 3x zoom. Do you need more zoom for travel or sports?
Video - most compacts now have video. The newer and higher priced cameras have more sophisticated video modes with much better quality output than the older cameras. This all comes at a price, of course.
Camera size and style - there is an extremely wide selection of styles, from sleek and slim like a pocket calculator to more traditionally wide and chubby. Just a hint, the larger the camera, usually, the more zoom and sensor size you can fit into the camera body.
View finder - more cameras are going away from the optical viewfinder (you know, where you have your eye right up to the camera) to an LCD viewing screen. LCDs vary in quality too, depending on the size of the screen and the number of pixels.
OK, lots of options listed here that make your choice soo much easier, right?
Well, I have actually made the process a bit simpler by narrowing down the field for you. I have spent many hours searching the camera review sites looking for the perfect camera. As you may guess, perfect is a function of your needs.
But I do have a formula for my recommendations.
Check imaging-resource.com to see if the camera I am considering has a "thumbs-up".
Check dpreview.com to see if the camera has a "highly recommended" rating there.
Check the users' ratings on dpreview.com. The rating here must be above 4.0 (out of 5). The only exception here is if there are less than about 20 reviews because the camera is a newer model.
Check the users' ratings at amazon.com. These user reviews are very valuable, especially when they tell the reasons for liking or disliking a particular camera. Once again the rating must be above 4.0 out of 5 to receive my recommendation.
I must admit that I am partial to cameras that have a higher number of sales. I think that lots of sales speaks volumes when it comes to quality. Now, this also means that I have many more Canon and Panasonic recommendations than any of the other brands because they are the cameras that sell most in the Digital Compact Camera market. If you are happy with an Olympus or a Casio, go for it. But make sure you do your own research before putting forth your hard earned cash. Yes, you can always return the camera, especially if you buy from one of the more reputable online stores such as Adorama, B&H Photo, Amazon, and Abe's of Maine.
Please don't jump at the lowest listed price without checking the reputation of the online store. You can do that at resellerratings.com.