(FORTUNE Magazine) – My first camera was a Brownie Hawkeye, and it was easy to use. All I had to do was click the shutter and wind the film. Actually, being 7 years old at the time, I often forgot to wind the film, which produced bizarre double exposures. I thought of them as art.

The new, affordable digital cameras are almost as easy to use, which is one reason I think they're going to be this year's hottest PC accessory. Even the photographically challenged can handle these gizmos. They let you review your pictures the moment you take them, so you can reshoot right away if you've cut off the boss's head. Once you're satisfied that you've got her mug complete, you can transfer the picture directly to your computer, edit it, and easily work it into Web pages, fliers, bulletins, or other documents. If you have a color inkjet, you can even make remarkably good prints.

That said, remember that a digital camera is a computer peripheral: It's not a replacement for your Nikon--or your Brownie. No digital camera will deliver the quality you get from a photofinisher. What's more, unless you spend a fortune on extra memory, you can take only a couple of dozen photos before you need to download the data to your computer. Relying on a digital camera for holiday snapshots, say, would be a very bad idea.

To give the new technology a workout, I tried one of the cheaper versions, a Kodak DC25, available on the street for between $400 and $500. Up front, it looks like every other point-and-shoot camera, a 3-by-5-inch box with lens, viewfinder, and built-in flash. But instead of relying on film to record the picture, the DC25 and other digital cameras use a photosensitive chip called a charged-coupled device, or CCD. It resolves an image into dots, or pixels, which the camera stores in its memory as digital bits. From there, the images can be delivered straight to your computer.

The more dots your camera can store, the more you'll pay. For a high price, you'll get high-resolution pictures that can be displayed or printed in large sizes without reducing image quality. Pay less, and you'll only be able to display or print your pictures in small size.

The DC25 offers a choice of resolutions, 493-by-373 pixels or 320-by-240 pixels. The former setting yields quality high enough to let you print out a good-looking 3-by-4-inch photo. The latter looks good only up to 2-by-2.3 inches. The unit's two-megabyte memory can store 14 high-resolution pictures or 29 low-resolution ones. You can double that capacity with a slide-in extra-memory card ($100).

The 47-mm fixed-focus lens allows you to shoot subjects that are two feet or more away. There are no exposure controls--the DC25 automatically sets the aperture and shutter speed. The camera's ISO rating of 800 to 1600 makes it simple to take indoor photos; you'll need the flash only in the dimmest light. In fact, the flash is the only feature you control, by turning it off, setting it to automatic, or using it as "fill" to do things like lighten shadows on faces in bright sunlight.

What differentiates the DC25 from a standard bonehead camera is the back panel, where you can see the pictures you've taken on a small, color liquid-crystal display (see photo). You can make sure that what you snapped is what you want, then erase any images that don't measure up--freeing up memory for more photos.

Once you've shot a "roll" of pictures you like, getting them into your computer is a snap. A cable connects the DC25 to a serial port on the back of a PC or Macintosh. When you buy the camera you get two pieces of software to install on your computer's hard drive--a simple photo-retrieval program and a more sophisticated editing package called Photo Enhancer. Once the camera is connected, the retrieval program loads a contact sheet of thumbnail images onto your computer screen. To transfer a photo to your hard disk, you just click on an icon.

That's when the real fun starts. With digital photography, you get all the second chances you want to make your photos look great. Photo Enhancer is full of features that allow you to manipulate your photo. I particularly liked one that corrects the color balance of a photo if it's off as a result of the type of lighting (flash, fluorescent, etc.) you used when taking the picture. Another feature lets you remove red-eye from flash pictures. There's also software to help you put your pictures into calendars, fliers, or greeting cards. Finally, Kodak throws in the delightfully perverse Kai's Picture Goo, which enables you to slice, dice, stretch, and distort any image to your heart's content.

If you work in a small office and plan to use the DC25 to create newsletters and brochures, consider pointing your Web browser to www.jasc.com to download a copy of Paint Shop Pro, a $70 shareware program from a small company in Eden Prairie, Minnesota, called JASC. With Paint Shop Pro, you can edit your photos pixel by pixel and even airbrush away ugly wrinkles so that you put your best face forward.

If you shop for these things at your local camera or computer store, you can spend more for higher resolution, zoom lenses, and other bells and whistles. But if you're running a small business or looking to jazz up your Web page with photography, you may find the DC25 just right. Kodak hasn't put its film division out of business, but with the DC25, it has proved that point-and-shoot digital photography has arrived.