Things seem to be levelling out on the Megapixel front, if you really want a new one look for something in the 7-8 Megapixel range unless you're considering getting a Digital SLR (much more than your price point!) The sensor size on the compact cameras stays the same, so the more megapixels the less light per pixel - ie it's less sensitive in poor light, digitial noise creeps in etc. The sensors in the DSLRs tend to be bigger so it's less of an issue.
Things to look out for....
Optical Zoom is much better than Digital Zoom. Optical moves the lens; Digital basically takes the centre part and makes each pixel bigger, so you lose quality.
Batteries. Comparing a couple of compact Pentaxes, ones with a rechargable battery are better than ones that run of AAs - while you can get AA batteries anywhere, you need to as most cameras will eat them at a rate of knots.
Oh, and look at
http://www.bestcameras.co.uk - they're the internet front end to a genuine camera shop in St. Helens called Kamera, we've had a couple of cameras from there and got really good service both times. Their prices are pretty good too....