There are tons of features that you can get on today's digital cameras, especially on the more expensive models. It seems like the manufacturers come up with a new feature almost every week.

To help make you aware of the most important features and what they do, below is a list of the more popular features and also some terms that you should be aware of when shopping for a digital camera:

There are other features, but these are the main ones

Resolutions

Resolution: The greater the resolution, the larger the prints you can make. A 2-megapixel camera will produce a good 4" x 6" standard size print and also be sufficient for web photos which display at approximately 72 dpi. If you are going to be producing 8" x 10" prints and will also be cropping the photos, then you'll want to consider a 6 or 8 megapixel camera.
Optical Resolution: The optical resolution is based on the maximum number of pixels in the Image Sensor device in the camera. This is a fixed number and does not change. Digital Zoom does not increase the Optical Resolution, it merely blows up a portion of the Image Sensor device, so it's like cropping a portion of a photo.
Interpolated Resolution: Allows a camera lens to magnify an image beyond the available pixels. Software is used to do the interpolation. This increase the image size but does not increase the actual detail of the image. This also increases the file size.

Files, File Storage and File Compression

Storage Capacity: Higher capacity devices store more images. If you have a 6 megapixel camera, it will fill up your storage media 3 times faster than a 2 megapixel camera, assuming you are taking photos at the maximum resolution in each camera.
No compression or Low compression: This will give you the best image quality but with it, you will get larger file sizes so fewer images can be stored on your storage media. JPG and TIFF images can be compressed but RAW images can not.
Storage Media: PC Card, CompactFlash, SmartMedia, others
Removable Media: With Removable media you can remove a storage device when it's full and insert another one and continue shooting pictures.
JPEG format: This is the most common digital camera image format.
RAW format: An uncompressed format that contains all of the data picked up by the image sensors when the picture was taken.
TIFF format: The most widely used "lossless" image format.
Color Depth: 30 is very good. 24 is good. The greater the color depth, the more realistic and accurate your pictures will be. Digital cameras will usually have a minimum of 24. Many cameras will also allow you to take black and white photos, which is an 8 bit depth.
Battery Type: Rechargeable batteries are nice to have when you use an LCD screen a lot of the time, assuming you carry around extras. They'll save you money over the long run, but standard alkaline batteries can be bought at any drug store or department store if you need more batteries and don't have time to recharge them.

Lenses and Lens Features

Image Stabilization: This is a fairly new feature for lower end cameras, but manufacturers are starting to including it. What it does is take the blur out of a photo when you move the camera slightly, when taking your photo. It is accomplished in one of two ways. Either by using a gyroscopic sensor that detects movement and then activates a small motor in the camera to shift the lens (or the Image Sensor) to compensate for the movement, or by increasing the sensitivity of the Image Sensor so the shutter doesn't stay open as long, essentially freezing the motion before any shaking causes a blur
Thru-The-Lens (TTL) viewing: This lets you look through the lens of the camera to see the actual area that the photo will encompass. It also will not show you what your picture will look like (color and lighting corrections), as a preview screen will.
Optical Viewfinder: A viewfinder that allows you to see the general area that you photo will encompass. It does not use power, but will not show you what your picture will look like (color and lighting corrections), as a preview screen will.
Digital Single Lens Reflex Cameras (SLR): SLR cameras were used by serious photographers before the era of digital cameras started. They were the standard. Now you can get digital SLRs and you can exchange lenses just like you could with the film based SLRs.

Digital SLR cameras enable users to manipulate light and depth of field through a mix of manual and automatic controls and interchangeable lenses, with the added advantages of digital photography. You can put on a large telephoto for a close up of an animal that is far away, and then switch to a wide angle lens to take a scenery shot. You can also get specialized lenses. But, you'll spend more money and have more equipment to carry around.
Zoom Lens: Most digital cameras allow you to have Optical zoom and Digital zoom. Optical zoom is better, it is like a telephoto lens for capturing distant object. With Digital zoom you start loosing resolution. It's like cropping a picture. It takes a small area and then blows it up to fit into your original area. You get no more detail than you had before, in fact your picture will start to look grainy as you blow up a small area. Most cameras have a 3X Optical zoom lens. There higher the better. Some of the more expensive models have up to 10X or 12X Optical zoom.
Macro Lens: Macro mode let's you get very close to small objects so they will appear larger in your photo. Nice for pictures of butterflies, coins, flowers, etc.

Modes and Taking the Picture

Preview Screen: An LCD screen that allows you to see what your picture will look like before you take it. They also allow you to look at any of the pictures you have already taken. The downside is that they will cause your batteries to be used up more quickly and they don't work real well in bright light settings so you'll also want to have an optical viewfinder.
Shot Delay: The lower end models will have a longer delay between shots. Some models will be as long as 6 or 7 seconds. If you will be taking a lot of pictures where you'll need a quick response between shots, then you'll need to consider spending more money to get a short delay time.
Sensitivity: A higher ISO sensitivity means a higher film speed, or more light sensitivity, so you will need less light for a good exposure.
Shutter Speed: The faster the shutter speed, the better you can capture objects in motion without blur. A fast shutter speed is necessary if you are going to be taking pictures of sporting events. 1 / 1000 of a second or faster would be a good speed.
Aperture Setting: The smaller the aperture setting, the greater your depth of field (the area that will be in focus).
Automatic Mode: The camera will set both the aperture and shutter speed.
Manual Mode: You will set both the aperture and shutter speed.
Shutter Priority Mode: You set the shutter speed and the camera selects the best matching aperture setting.
Aperture Priority mode: You set the aperture and the camera selects the best matching shutter speed.
Low Light Mode: The camera will select aperture and shutter speeds to compensate for low light situations such as deep shadows or nighttime. A nice convenience.
Exposure Compensation: You can adjust the exposure one or two stops in either direction to lighten or darken scenes. Good for taking pictures at dusk or in the snow. Many cameras have special settings for these kinds of conditions which take out the guess work.

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