I bought the Canon Power Shot S1 IS with 10x optical zoom a few months back. You will need to upgrade the memory card, but other than that it is a great camera.
I picked this one because of the clarity of the pictures and I could buy a housing for diving. The housing cost almost as much as the camera
While I was on vacation I took about 400-500 underwater pictures at around 40-110 feet and they turned out great.
This camera has one big down side, it eats batteries so have lots
Robert