I would highly recommend Nikon's Coolpix series. I have two, and a friend has another model - he's a modeler too! -. All work perfectly, have lots (too many!?) functions including macro. Optical zoom is a must of course. This was not my first digital camera. I had a Ricoh before that and got quite disappointed and frustrated. Don't let yourself be tempted by high numbers in the Digital zoom avenue! None of the 3 camera I'm talking about here have more less than 2 and than a 3megapixels and that's just perfect for work on the PC and still give extremely great results on the printer, even with photographic paper. I use mine (2.1 MP) to do portraits of models I have face-painted and sell the pics, on calendars and stuff like that, to the parents and grand-parents.
Also, get something that has NiMH rechargeable batteries, and get yourself a second set, to be on the safe side. And also chose something that has an optical viewfinder AS well AS a screen. There are times when the screen can be a pain, and there are times when the battery is low too!
You can do a search on my screen name and you'll find numerous pics I've taken with this camera (admitedly, I reduce the size of the pictures before uploading them on Ron's gallery, though!)
More pixels just give you bigger files on your PC that take longer to send and longer to download at the other end...
Good luck!