The Sony DSC H-1 is a wanna be D-SLR. It can take good pics but lacks the manual controls and interchangable lenses of the D-SLR's. That camera is also $499 at Walmart for a heads up.

Any of the Canon powershot series will be a good "upgrade" from what you are at now and will produce some very nice results as well. If you looking for a camera for genral use and to take some nice pictures then I recommend any of the Powershot series. I started out with a Canon Powershot A60 and had some good results with it.

As for the Nikon's, they are known for their glass. The lower end Nikon's glass is not up to par with the higher end P&S camera such as the Nikon 8700 or 8800 but those cameras are also over $650 each. The one Karen (Ren) has is a decent camera and can produce usable pics as you can see in her thread for Swurvin's b-day party (once she learned how to use it ).

What you really need to ask yourself is do you want a camera that has some Manual control or do you want just a typical point and shoot with scene modes? Do you want a good amount of zoom? If the answer is yes then you want to find a camera with higher optical zoom and shy away from the digital zoom. Optical zoom will give you clearer, sharper pics compared to digital zoom. These two questions will give you a general idea of the camera you want. Also don't be afraid to pick up a 4mp with a higher optical zoom as it will still give you about the same quality pics as a 5mp.