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Digital cameras have evolved much in the past few years to include more capabilities, sharper and larger viewing screens, and slimmer builds. So while some people may still be shopping for their first digicam, many others are looking to buy a second, improved version of their current camera.

It’s a good time to be in the market for such a camera. According to research from Olympus, unit sales for these gizmos has grown about 30 percent in the past two years, while dollar sales grew at about half that rate, indicating declining prices and improved technology. In fact, digital-camera prices have dropped an average of $30 over the past 12 months.

This guide offers an overview of the basics you’ll need to know when buying a digital camera.

THE MODELS

Flaunt and Pocket

As you begin looking for a camera, selecting a preferred size and shape will help narrow your choices. Like iPods and cell phones, stylish pocket cameras are fashionable accessories; some come in shades like Precious Rose or Noble Blue. These pocket models, designed with emphasis on small size, are as easy to carry as they are to use for taking good photos; most offer seven or eight megapixels each, a 3x or better optical zoom lens and a stunning viewing screen.

Examples: Sony Corp.’s $400 Cyber-shot DSC-T100 or Nikon Inc.’s $300 Coolpix S50.

Point and Shoot

If you don’t mind sacrificing style for a camera that’s sturdier in your hand but bulkier in your purse, point-and-shoot models will be more your speed. On average, these cost less than their showy cousins. They’re more likely to have protruding zoom lenses that don’t collapse entirely into the camera body and often feature larger buttons.

Examples: Eastman Kodak Co.’s EasyShare C653 and Canon Inc.’s PowerShot A460 (at right) — both cost $130.

CAMERA LINGO: WHAT’S THAT MEAN?

– Megapixels: Most cameras offer anywhere between six and 10 megapixels. While higher megapixel counts are easy to find for less money, such high resolution is really only necessary if you plan to heavily edit or blow up your photographs for jumbo prints.

– Zoom confusion: Pay attention to the optical zoom, an enhancement made by a physically moving lens, not digital zoom, which instead magnifies a photo using the camera’s digital circuitry. A camera with about a 4x optical zoom is sufficient for most.

– Storage: One-gigabyte memory cards cost about $30; two-gigabyte cards, $50. Data can be transferred from these cards by plugging them into a computer using an adapter or a card slot, or cameras can be connected to PCs with USB cords.