1. Figure out what your budget is.
2. Decide on the list of brands that you want (if you have religious preferences regarding brand names, otherwise this step is optional).
3. Go to http://www.dpreview.com, pick a few cameras, read the reviews. Skip to the conclusion if you're lazy, go see what people say about your beloved camera on forums if you're not.
4. If the conclusion is Highly Recommended — go to your local camera store (e.g. Ritz/Wolf Camera, BestBuy, or whatever you live by) and see how these cameras feel in your hands.
5. If everything looks fine — go ahead and buy it (most likely online, i.e. from B&H or Adorama, or KEH, or whatever is your favorite store. It is usually stupid in an expensive way not to buy online).
6. Be happy!
Algorithm from Micle Fedotov,
debugged and improved by Dmitry Azovtsev.
P.S. for the Laziest of the Lazy
It hardly gets any simpler then that, but somebody always asks: well, so which model should I buy? Obviously, there's a new camera coming out every month and I neither can nor want to keep track of them. But for those of you who are too lazy to do even the most basic research: get one of the cameras in Canon PowerShot Ax5 line (A95, A85, A75, etc.) I haven't used them myself, but judging from reviews and descriptions (as of the end of 2005) — that's exactly what you need.See also: