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The best digital camera for capturing unforgettable moments is simply the one that will get used.
With that said, there is a huge variation in the available cameras in terms of cost, capabilities, size and durability. This is a good thing as it provides a good variety of choice at each price level that a consumer is willing to spend.
There are 6 categories that I would like to break cameras down into. In order from fewest features to most, they are the 'Cell Phone Camera', 'Basic Point and Shoot (P&S)', 'Advanced P&S', 'Consumer Digital Single Lens Reflex (DSLR)', 'Professional DSLR' and 'Medium and Large Format Digital'.
SENSOR TYPE
There are two main technologies that are used in digital camera sensors. The first were Charge Coupled Devices (CCD). These came first and for high performance situations are still often the best choice. They are the more expensive option.
Newer and less expensive are the Complementary Metal Oxide Semiconductors (CMOS) sensors. These are made using a similar process to that of a computer chip. Most digital cameras are made using these sensors because the quality has gotten much better while staying cheap to manufacture.
CELL PHONE CAMERA
These are the smallest sensors around, often just 1/10" in size. Their small size enables them to be unobtrusive, lightweight and very cheap. The images made from these is variable, with well-lit subjects turning out fine, but dark images having excessive amounts of noise. The biggest advantage is that they are so easy to carry around.
BASIC POINT AND SHOOT (P&S)
This type of camera has improved performance and resolution. With slightly larger sensors and better image processors these cameras are great for taking pictures for internet use or where the images will seldom be printed for storage. Resolutions for these are in the 1 Megapixel - 3 Megapixel range. Small, light, excellent battery life and small storage requirements make them very affordable for snapshots. Downsides are a lack of control, little zoom capability and little ability to produce large size prints.
This is the best camera for most people. This allows for 4x6 and 5x7 prints that look good, and balances the cost vs quality. The portability of these cameras makes it easy to usually have it with you and the small size makes it unobtrusive to use.
ADVANCED POINT AND SHOOT
These cameras are getting into the highly capable arena. Costing several hundred dollars they offer a broad range of capabilities. Sensors in these cameras are not only larger
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