I've used a dedicated waterproof camera (Pentax W30), a p&s in a waterproof case (Canon G9), and a DSLR in a waterproof bag (Canon 10D in EWA Marine). The DSLR gave by far the best image quality, but it was a pain to use and I never really trusted the bag. The dedicated waterproof camera was the easiest to use, but it died, was replaced, and died again. I suspect that (at least for the latter time), water intrusion somewhere was the issue.
If you really want to use a camera underwater a lot, you have to be religious about keeping the seals clean and properly greased. I grain of sand or a stray hair is enough to let water intrude and, given enough time, ruin the camera. Honestly, I find keeping the waterproof case for the G9 clean the easiest because there is one O-ring to worry about (albiet a big one) and because the clean shell will show water intrusion. I stuff a color changing bag of those water absorbing beads in mine.
The downside with the shell is that it is bulkier and a bit more of a nuisance to use. It's still my preferred route. We're looking at a D10 for my youngest, who really wants something to take pictures with. I won't encourage it's use as an underwater camera that much, but waterproof capabilities are good a kid that doesn't always think about things like rain, water hoses, etc.
I'd post sample picks, but I don't know that pictures from cameras several generations out-of-date would help much.