Stephanie,
I have a Cannon Power Shot S2. Had it almost a year now. It is 12X optical and 4X digital (500mm). Takes great pictures.
On a trip last year to Hawaii with other NELL members, it got nicknamed 'The Magic Camera' Because of the distance of the zoom. It's compact and very easy to use. Can plug it right into the TV to see what you have taken, downloads to the PC in no time at all and has many other features that I have yet to try.
They are also coming down in price and I believe you can pick one up now for under $400.00.
HCS