If you're looking for a digital camera beyond the basic, point-and-shoot variety, the next category to consider is made up of what are called 'bridge cameras,' so-called because they bridge the gap between simple and professional grade cameras.
Although the built-in cameras on smart phones are getting better every year, they are still somewhat limited in the amount of physical controls they offer, i.e. how much you can manipulate the image while you're taking it. The other downside to using a smart phone exclusively for your camera-taking is that they are a bit cumbersome to hold steady and don't fit on a standard tripod.
Having said all that, the GE X400 is about as low-cost a bridge camera that you will find. WalMart is selling it for $119 in white or black. For that low price you get a very well-built, but somewhat bulky 12 ounce camera with a nice, beefy handgrip. Its solid metal case contains a 15X optical zoom lens that shoots up to 14.1 megapixel images. The X400 takes standard SD memory cards and just as important, four ordinary AA batteries. There's a built-in flash and has a 2.7-inch rear LCD screen to view your images.
Special features include Face Detection for clear images, a Panorama feature that lets you compose a big picture out of three small ones, an Auto Scene mode that selects the most suitable camera settings, and Blink Detection, which will warn you if a blink was detected.
You can also shoot standard QuickTime (Mac-friendly) videos with the X400, just make sure your SD card is large enough to handle the files. (The X400 doesn't come with one).
If you want to move beyond simple smart phones and point-and-shoot pocket cameras for special events and holiday images, the GE X400 is worth a look.