For my travel photos, I use the Cannon Powershot SD1000 (7.1 megapixels). It's very user friendly, takes great photos, and is small small small! Plus, the battery charge lasts a LOOOOONG time.
I have that same camera...along with several others.

The Canon SD1000 is no longer made, it's been replaced with a new model...the SD1100 I think? Anyway, the SD1000 is a tiny little camera and takes nice snapshots. If you're basically looking for a point & shoot (no manual control, not changing aperature, etc) it's a good camera. Actually, pretty much all of the Canon cameras have good image quality. You really can't go wrong with any of them. If the Canon model number starts with SD, it's going to be a smaller camera. If it starts with A, it's a medium sized camera (okay for purse, but not your pants pocket). Look on Amazon.com and see the different models available. For excellent reviews, check dpreview.com or stevesdigicams.com.
I also own a Panasonic TZ5. If I'm not using my Sony A350 DSLR, this is actually my camera of choice. It's a bit larger than the Canon SD1000, but still small enough to put in my purse easily. However, it definitely wouldn't fit in my pants pocket, even without the case. My favorite thing about it is the 10x optical zoom feature, the high quality Leica lens, and the variety of setting (night shots, fireworks, beach, portrait, scenery, etc). This camera has recently been replaced with the newer TZ6, but you can still find the TZ5 in stock at many places (
Amazon.com, etc) for around $220. This camera was produced in black, silver, and blue...sometimes a particular color will be less expensive than another. For example, at the moment, the black one is about $100 more than the other 2 colors! Same camera, just different colors.
Someone above mentioned a HP camera...but HP discontinued its camera line a few years back.
A lot is going to depend on what you actually want to spend on a new camera. You can find digital cameras for $60 or $70...but you usually get what you pay for.
