Depends what you want really. For a small camera like that, I'd prob go for a Canon, Olympus or such.
I've got a Fuji Finepix S5500, looks like an SLR camera, small and light, has 10x Optical zoom 4x digital (optical zoom is the one you need) and a 1gb memory card is about £25 - £30. Uses normal AA/HP7 rechargeables and they last a good length of time.
The latest version is th S5600, you can pick them up for about £180 if you google it.