This is a fairly wide range, and many brands jostle for sales in this range.
Most importantly are your budget, and your shooting needs. If you have about 1000-1200 to bomb away, you could go for the 602Z, plus accessories like batteries, charger, tripod and external flash. At that range, you can actually get a very good 4MP camera (e.g. Canon G3), but fork out a little extra for accessories.
But you get fast AF, good images, wide range of functions, big zoom, good battery life.
If you are a casual, birthday/parties family point and shoot type, with budget of about 500-600, then the Canon A40 is a very good choice. Uses AA batteries, camera can be had at 390, throw in 12 AA batteries and fast charger for about 70, a tripod for about 30, and extra 128MB memory card for about 75. total package: under 600.
But this is a 2MP camera. So if you decide to print mostly 4-5R, then it will more than meet your needs.
Of course there are 1000 + cameras out there, but these are the 2 I have used.
The Mega Pixels on a camera depend on what you want to do with the images. If you are only printing up to 4R size or even A4, a 3MP is more than sufficient. My 2.6MP Canon Pro90 produces very high quality A4 prints on a 2880 dpi Epson Photo printer.
It's a waste of disk space and money to buy a 5.0MP compact camera that does not have a lens to match.
I have seen image taken on the 1st generation of digital EOS1. Only 1.3MP but the quality is very good. Some shots from a 5.0MP Sony look horrible.
I have a 6.3MP camera but most of the time, I select the smaller image size. A raw image will need over 7.0Mb of space.
A large MP needs a good printer and lens to match. Remember the weakest link!