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Forgot one other *must have* the wife mentioned, a lithium battery...her current Kodak eats AA batteries faster than I eat cheeseburgers!
Compact and easy to use probably best sums up the rest of her requirements...why she's mentioned Canon I don't know?
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Rob... those Canon Powershots are pretty cheap and they're basically ideal for the beginner. Some of the Powershots even come with instructional CD's instead of packets of information like my G7 came with. I would also imagine all of them come with the lithium battery as well. With today's technology, you cannot go wrong with any brand... if she wants a Canon, I guess you know what you're picking up...