We went the disposable, waterproof camera route for years...lugging the cameras in our carry on hither and yon. We used both Fuji and Kodak. We recently decided on getting a waterproof case for our digital camera. It cost $175. I figure that in less than 15 disposables it will pay for itself when you consider $8 for the camera and $4 for developing. Here are the advantages of the case:
1) the camera can store 100's of pictures without getting out of the water
2) you can delete the pictures that you don't like right away
3) you can use the same camera for all of your pictures
4) no film developing required unless you really need the picture
5) most digital cameras (ours is the Canon Powershot SD550) can take snippets of video
6) You can protect your regular digitial camera when on the beach or on a boat
7) the digitial camera is tiny and when you add the case it is about the same size as a disposable with a lot more features
8) you can use all the features of your digital camera....zoom, flash when needed, panoramic, etc.
9) When the memory card fills up (pretty hard to fill up our 2g SD card) you can download the pictures to your computer and start over
Here is a shot from CC of the submarine (water is a bit murky at CC):
Here is a shot or two from Hawaii: