Cool, welcome to the digital age. Whatcha gonna use it for? Seems like you can get a ton of features for a really good price now.
For someplace to start, I'd go with at least 3 megapixels. One thing I wish I had on mine is a 'burst' mode, where the camera will take shots in rapid fire action, saving each one to internal memory before storing it to a card. Saving images to the card takes a second or so, potentially having you miss the item or action you were intending to shoot. Durability is not really much of a concern any longer, they're built kinda tough now-a-days. This mini-video caputre is really nice. On a 128mb card, you can store almost 5 min of video, sometimes 'tricking' the camera into more.
One thing you'll notice right away w/digital is the lag 'tween hitting the botton and the shutter articulating. It's annoying, but you'll get used to it soon enough.
What ever you do, keep the manual as a back up, 'cause the digi will give up the ghost at inoportune moments. Or the lack of batteries....