I will make some more comments on picture size in the camera. Two things.
First, I never use the camera's 'native' mode, I always select JPG. The file size is huge if you use the native mode. Figure out how to set this. If they'res an option for compression, set it to get the best picture quality/larger file size. Too much JPG is a bad thing. The thing with native mode is with some cameras you can manipulate the picture more afterwards. I find I never need to do this. Invest in a good digital graphics program. I recommend Paint Shop Pro 7. Things like MS Photo are ok, but do not have enough features.
Second, I have never used its highest res, I am always on the second from highest one, which is 1360x1024. I have printed off a few 8x10s and I can't find any issues with them. Printing is as much a factor when printing a picture as the picture size. You need a printer that can print photo quality. Higher the dpi it's capable of the better. But you will find yourself printing less and less photos once you figure out a good system to view them on your pc. And with some of these portable devices coming out, even less so.
Now, about memory. Memory is cheap everywhere right now, I'll include some examples. Now, don't go for this 'faster' or 'enhanced' memory unless you intend to do 100 pictures a minute or something. That's all it's good for, won't help casual picture taking any.
And these examples you can find 256m of some types for $50 as well. I always suggest caution in buying electronics off Ebay.
My favorite three places to shop for computer stuff(click the names), I can guarantee good service from any of them. These are links directly to the sections with camera memory, Know your type!
Best Buy
CompUSA
CDW