Pentax Optio W90 is what I bought a few months ago. I am overall pleased with it (as far non-SLR’s go), but I did note some downsides…
http://www.amazon.com/Pentax-W90-Waterproof-Pistachio-Green/dp/B0039237H4/ref=sr_1_2?ie=UTF8&s=electronics&qid=1280327881&sr=8-2
downsides
– more $$ than your price range
– video says its 720p, but the lighting in the video is not great, at least in lowlight conditions as well as very bright conditions.
– zoom during movie mode is not optical (digital only)
upsides
-compact
-can get a floating lanyard for it.
-waterproof, shockproof, freezproof
-underwater video mode is WAAAAY cool, and does a great job. (I’ll see if I can get some Michigan salmon underwater vids)
-outdoor pics are fantastic.
-flash is good
-TONS of options and extras (ex, time lapse photgraphy/movies)
SHOULD NOT BREAK IF IT GOES FOR A SWIM.
Underwater videos… (note, sediment/bottom silt was stirred up – not the camera’s fault)
http://www.youtube.com/watch?v=t-vj7QFJqgM
http://www.youtube.com/watch?v=aSnnzrw0vwg
Otherwise look at Panasonic TS2 for a waterproof camera…. I heard good things about that one (better video and possibly pics than the Optio W90)