(MONEY Magazine) – There's a lonely spot at your local camera store: the section of counter with the point-and-shoot film cameras. "We take them out and dust them and place them back on the shelf," says a clerk at a branch of Wolf Camera on a busy shopping corner in Chicago. "They look very pretty, but we rarely sell them anymore."

At one end of the counter, however, a crowd gathers, cooing at the latest crop of digital cameras. This year, for the first time, digital cameras are expected to outsell their film cousins. No wonder. The newest models are more fun, more capable and, for busy shooters, cheaper to use than film. Even by consumer-electronic standards, digital models have dropped in price and improved in quality at an impressive pace. Prices of some high-end cameras are now a twentieth of the price of lesser models three years ago.

The new cameras are so good, in fact, even pros are making them standard equipment. It's time now for you too to let your film camera collect dust.

First, some math. It typically costs 39¢ a frame to develop your film at a discount photo lab, and you pay for every picture, whether the kids come out looking like angels or fodder for Uglypeople.com. Once you buy your digital equipment, however, the price of taking pictures is zero. Most important, it costs nothing to shoot badly. You thus have in your hands one of the secrets of great photography: volume. Snap hundreds, sift for the brilliant few.

With their latest lineups, digital camera makers are raising the specs in the consumer sweet spot (the $300-to-$500 range) from two megapixels to three. That ups the amount of visual information the cameras can record by 50%. It also means, at last, that affordable digital cameras now rival film in quality. They may even surpass film cameras in variety. To keep you from spending your summer days inside the camera store rather than outside snapping, we offer some tips on shopping and our picks in all the major digital camera categories.

CLARITY ON LENSES Photography is about gathering light and detail, so the lens is your most essential element. You might expect old-line players like Canon, Minolta and Nikon to have an edge here--each makes superb optics--yet even great camera companies equip some of their lower-end models with not-so-great lenses. What's more, relative newcomers to cameras feature glass from some of the most renowned lens makers. Sony, for instance, uses top-tier German manufacturer Carl Zeiss for its pricier cameras, while Panasonic uses Leica. Pay close attention to optics while shopping; cameras with inferior lenses produce soft and distorted images.

Most lenses offer a digital zoom or a combo of optical and digital zooms. But zooms are the subject of ludicrous marketing ploys. Only the optical specs--how much the lens magnifies, not the digital processor in the camera--mean much. A digital zoom does, in essence, what you can do later (and better) on your computer; rather than bringing you closer to the image as a lens would, it enlarges and degrades the individual pixels on its sensor. You want to capture the best-quality image you can, not the largest, since better images give you more options later when you're doctoring or cropping them on your computer. If you see a camera sporting a 30x zoom, you're being had. It's mostly digital.

MEGAPIXELATED The second most important feature, and most misunderstood, is the camera's megapixel count. Higher megapixel counts allow you to print bigger, clearer pictures. (Megapixels also refer to the resolution of pictures. High-megapixel cameras can take high-and low-resolution pictures.) Yet most users rarely enlarge photos bigger than 8 inches by 10 inches. Costlier high-megapixel cameras earn their keep mostly by producing images you can crop to bits, letting you make a good photo out of the best section of a poor one. By the time you hit the more expensive five-megapixel range, you can plumb a group photo and fashion a head shot out of one in the crowd. If you tend to shoot from a distance--as travelers often do--aim for at least four megapixels. Care to see what's in the window of the high-rise you shot from down the street? Sorry, you still need a telescope for that.

NEED FOR SPEED One of the most useful features to look for is bracketing mode. A single push of the shutter button produces three quick pictures, each with a slightly different exposure, each allowing in a slightly varying amount of light. This increases the likelihood of capturing the scene as you see it (or as you want it to be seen). Some high-end film cameras can bracket too, but it eats up film and, of course, you pay for the frames you don't like. Remember, with digital cams it costs nothing to take poor shots--you can delete the two you like least. Digital cameras also handle extra-bright and low-light situations that take careful planning with film. Some can penetrate near darkness, even without a flash.

POWER PLAYS Digital cameras are a bit like Imelda Marcos: They crave power and storage. New kits come with one set of batteries and an absurdly small memory card. You'll need more, especially when shooting on long trips (digital media are unaffected by airport X-rays) or at life-changing events where you'll want your camera fully charged, such as weddings and parking-lot collisions.

To avoid doubling your purchase price with accessories, look for standard memory and batteries. The two most common types of memory are compact-flash cards and the smaller secure digital, or SD, cards. Prices for a 256MB compact-flash or SD card--enough to hold 200 high-resolution shots--have fallen to $65. It can also pay to pick a camera that uses the same memory format as devices you already own--MP3 players, PDAs--and swap the cards as needed. Most camera makers use one or the other memory standard. But Sony, which uses its own Memory Stick, and Olympus and Fuji, which use their new xD cards, charge about double for their media.

Getting standard batteries is more of a challenge. Most digitals today use expensive proprietary batteries--a lack of standardization that apparently has less to do with consumer needs than with the camera maker's own need to sell specialized accessories with high markups. Even cameras from the same lines often use different battery types. Prepare to pay $50 apiece or more (you'll need one extra set at the very least). A few makers, such as Minolta and Ricoh, have generously stuck to rechargeable AA batteries, costing about $10 for a set of four. Others, such as Canon, Nikon and Olympus, use these generic batteries in some but not all their cameras.

WHERE TO SHOP Prices move fast in the digital camera market, and the online retailers tend to respond fastest. Dell has lately been offering aggressive pricing for its limited selection of cameras. Also, look for daily promotions at Tech Bargains (www.techbargains.com), which frequently links to discount coupons for Dell, Buy.com and others. Reliable New York City mail-order houses B&H (www.bhphoto.com) and Adorama (www.adorama.com) are also worth checking. You can find help with comparison shopping at two websites obsessively devoted to digital cameras, Digital Photography Review (www .dpreview.com) and Digital Camera Resource (www.dcresource.com). Pick the features you want, and they will offer a list of current cameras that fit the bill.

OUR FAVORITES Which cameras are best? It depends on how you want to use them. There are four basic kinds.

ULTRACOMPACT Small enough to fit in a change purse, most models fix all the camera settings (except the zoom) automatically. The upside is you won't need to study all sorts of possible tweaks in a manual; the downside is you won't get many tweaks. Their lenses are also small, which affects the quality of shots. But they go anywhere, and there is logic in the maxim that the best camera is the one you will use. Here are two we like.

Nikon Coolpix 3100 (list price: $350). This three-megapixel camera barely covers your palm, has a great Nikon Nikkor lens, and uses compact-flash memory and standard AA batteries or rechargeables. It's also easy to use out of the box.

Olympus Stylus 300 ($399). A three-megapixel version of the film world's most popular camera, the Olympus Stylus, it has everything to hate in a digital camera: a proprietary battery and nonstandard memory. It also has everything to love: great images, a solid feel in your hand and, unlike virtually all other digital cameras, the versatility to be used in rain, snow and, cautiously, in a pool.

COMPACT These can fit inside a jacket pocket and give you more control over your pictures. (They can also capture short movies.) This is the most crowded category. For most users, they offer the best combination of excellent images, features and convenience. These two stand out, each for its own reasons.

Minolta S414 ($399). This may be the market's best deal. The four-megapixel camera is a good $200 cheaper than comparable models, has a great lens and uses compact-flash memory and AA batteries. The S414 also allows you to grow as a digital photographer, letting you choose its idiotproof automatic mode or play with the different settings--like shutter speed and aperture--that serious photographers crave.

Ricoh Caplio RR30 ($299). Available only through QVC and a few online retailers, the three-megapixel RR30 overcomes the chief fault of digital cameras: shutter lag. Most digitals have a slight but maddening delay between the time you press the shutter and the moment they snap the picture. The RR30 shoots instantaneously, making it uniquely suitable for photographing fast-action sports. It's designed to use SD-card memory and any of six different kinds of batteries, including standard rechargeables. And the $299 price makes the RR30 a real bargain.

SEMIPRO This is the next step up in price, size and features. You'll need a camera bag, but you'll also get lots of controls and a big, powerful, built-in optical zoom lens. Semipro cameras demand about twice the investment of compact cameras but offer most of the controls that serious amateurs (and an increasing number of professional photographers) need. Consider these two.

Canon Powershot G3 ($799). A four-megapixel camera with a 3x zoom, it sets the current standard for image quality. People who like reading manuals will be rewarded with the ability to fine-tune the G3 to capture any setting or mood. It uses CF memory and a Canon battery.

Nikon Coolpix 5700 ($999). It has five megapixels, an 8x zoom, superior glass, lots of flexible controls--all in a package that's ideal for traveling and capable enough for serious photographers. If you don't need quite as big a zoom, the similarly sophisticated Coolpix 5400, with a 4x lens, is $200 cheaper.

DIGITAL SLR (SINGLE LENS REFLEX) The big daddy of digital cameras--and the one that offers the best-quality pictures at the highest resolution. Digital SLRs so closely follow the click, click, click of the classic film cameras used by pros that even Austin Powers would feel at home with one. And like film SLRs, the digital models let you use the vast variety of interchangeable lenses that camera makers have long been building for their best film cameras. If you've already invested in a collection of lenses that you love, consider a digital SLR, but be prepared to put out at least $1,500. If not, the semipro models offer nearly the same functions without the added weight or cost.

Nikon, with its Nikon D100, and Canon, with its Canon 10-D, have been the most aggressive in what's considered the consumer end of the digital-SLR market. They keep leapfrogging each other, and Canon is now ahead with its new, supremely capable six-megapixel 10-D. The Canon lists at $1,500, down from $30,000 for its professional predecessor a few years ago. Consumer demand is outstripping production, however, so you may have to put your name on a waiting list to buy one. With digital SLRs, you should think about lenses first. If you already own a lot of Nikon glass, the D100 ($1,700) will also bring you into the digital age nicely, only a few steps behind Canon owners. Or maybe ahead, since the D100 doesn't have a waiting list.