I have a Canon Powershot A40 and have been very impressed with it. Its a 2 Megapixel camera with plenty of features (3X Optical Zoom, Movie mode with sound, auto and manual controls and plenty of other features). I paid about $750 for mine (about 10 months ago). However it now can be found for around the $600 mark (at the website I list below). IMO no other camera, for the same money, has as many features or can produce as good quality pictures as the A40 can.
My rule of thumb when buying a digital camera was to spend as much as I could afford. If you have $1000 to spend on a digital camera then you should be able to get a camera with more Megapixels (I.e bigger pictures) than the A40. Generally with digital cameras you get what you pay for. More Money = Bigger and Better Quality Pictures.
The other thing to take into account when buying a digital camera is accessories. Most cameras only come with a small amount of memory (E.G a 16mb Compact Flash card - good enough for about 16 pictures on my camera (on the higest quality level). This isn't enough storage for most situations. So I brought a 64mb CompactFlash card to use as well (Holds about 64 pictures on the highest quality mode on the A40) This was about $70.
The A40, like most digital cameras under the $1000 mark, doesn't come with a case so I also bought a nice case for it another $40 to add on.
The A40 uses 4 AA batteries however digital cameras go through AA batteries like LS1's go through oil (Sorry I couldn't help it). So you really need some decent rechargeable batteries. I paid $50 for a battery recharger and 4 1600 rechargeable batteries (from the place I brought the camera from). I then brought another set of rechargeable AA's from Dick Smith so I always have a fresh set of batteries to use. On average I get about 100 - 150 pics from each set of batteries. That includes using the LCD screen all the time and uploading to the computer.
So when you add up the accesories you are looking at another $180 that has to be factored into the cameras price. Once you factor these accesories in (none of them I could do without) the A40 basically becomes an $800 camera not a $600 camera. Hence with each camera you look at work out what extras you need to buy for that particular camera.
In regards to where to find information on digital cameras, I found the best thing to do was to read plenty of reviews on digital camera sites. The sites I used were the same as mentioned by 3Toed. Of particular note is http://www.dpreview.com
however all of those sites listed are damn good resources when looking for digital camera information and reviews.
Personally I found the best place to buy digital cameras, in Australia, was from a place called Dirt Cheap Cameras
I found they were much, much cheaper than anyone else I could find (over $100 cheaper than retail price on my camera when I brought it). Their service was also first class and I had the camera within 2 days of ordering it. I can't recommend them enough, very impressive indeed.
One final piece of advice, don't rush into buying a digital camera. They are very complex and there are alot on the market. Subsequently you need to take plenty of time to understand which camera will suit your needs best. It took me quite awhile (well over a month) to learn about and decided which digital camera to get. However I have been extremely happy with my camera which made it well worth waiting for.
Sorry this post has been so long, however, hopefully it will be of some use. If you have any other questions don't hesitate to ask.