he did say that $500 is a bit overkill for him, so a dSLR, while it may be preferable, is not an option for him, considering that the Canon Rebel & Nikon D70 start at around $1000.
If he's mainly going to be posting pics on the internet, he won't need a lot of resolution, so getting a lower (like 2 megapixel or 3 megapixel for example) resolution camera will help keep the pixel density, and the image noise, down, somewhat.
are there any cameras with...
1 megapixel on a 1/2.7" sensor (I think I've seen 2)
2 megapixels on a 1/1.8" sensor (minimum I remember is 3 or 4)
3 megapixels on a 2/3" sensor (minimum I've seen is 5)
also take a look at some of the sample pics on www.imaging-resource.com
- I like the quality of the high ISO indoor portrait without flash pics from the Fuji F700, for example (even though the highest ISO (1600) forces you to use 1 megapixel resolution, which I think would still be fine for posting on the web).