Check out the latest prices on the Canon Powershot G series. Found one for
$420 - Canon PowerShot G5 Digital Camera
5.0MP, 2592x1944, 4x Opt, 32MB CompactFlash Card
http://www.pricegrabber.com/search_attrib.php?page_id=48&form_keyword=canon+powershot&rd=1
And it does do video, I bolded the most important things to look for, for the G5 this is pretty decent. If your serious about photography or think you will be in the future, save your money and go with the Canon Digital Rebel or 20D ($800 and $1500 respectively) But worth every penny.
Digital Zoom: 4 X
Exposure Settings: Aperture Priority, Auto Exposure, Manual Exposure, Shutter Priority Flash Characteristics: Built-in Flash
Focus Features: Auto Focus
Image Sensor: CCD
Included Components: Carrying Strap, Flash, Lens Cover, Recording Media
Interface Type: USB - Universal Serial Bus
ISO Equivalencies: 100, 200, 400, 50
LCD Screen Size: 1.8 in
Max Aperture: 8 1/f
Max Horizontal Image Resolution: 2592 pixels
Max Vertical Image Resolution: 1944 pixels
Max Zoom: 16 X
Memory Type: CompactFlash
Min Aperture: 2 1/f
Number of CCD Pixels: 5000000
Number of Resolution Modes: 4
Optical Zoom: 4 X
Removable Flash Memory Included: 32 MB
White Balance: Preset Modes, TTL Auto
Image Format: JPEG, RAW
Maximum Video Capture Resolution: 320 x 240
Video Capture Format: AVI, QuickTime
Maximum Shutter Speed: 2000 1/f
Minimum Shutter Speed: 15 sec.
Dimensions
Height: 2.91 in
Width: 4.76 in
Depth: 2.75 in
Weight: 14.473 oz
Nice cameras. But get a larger Compact Flash Card, at least 256MB, 512 would be better.
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RAW files are in a proprietary format that is unique to each manufacturer, and often unique to each specific camera model. These files are compressed "losslessly". That is, they are smaller than when expanded to a standard TIFF file in Photoshop (usually by a factor of 3:1), but no information is lost in this compression. The real advantage of using a RAW format file is that it has received almost no processing by the camera. No sharpening or White Balance will have been applied. What you have with a RAW file is essentially a digital camera's "negative" or original. You also can work with the file in 16 bit mode, whereas JPG files are always 8 bit. All of this means that when you work on the file in Photoshop you are starting with a much higher quality original than with a JPG file and also have much greater flex ability in applying corrections and adjustments without significantly degrading the final image quality.
But because these RAW file formats are unique one needs to use a special program to "decode" them. Camera manufacturers provide special software for decoding their RAW files, sometimes free with the camera and sometimes as an extra cost option.
From:
http://luminous-landscape.com/reviews/software/camera-raw.shtml
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If your not a PRO photographer or a serious amateur then RAW isnt for you.
Hope this helps