I like the device convergence. I replaced my old digital camera with the camera in my new(ish) phone. I'm using the Samsung D807 right now. It was $50 when I picked it up. I got it mostly for the camera, while only at 1.3megapixels, does very well for what I want. I just got back from a month in Mexico and I took over 2300 pictures on it. While not the best pictures, they are great for what I use them for, Facebook.
Check some out. I know a dedicated digital camera will take better pictures, but with this I don't have to worry about taking it with me or having another device in my pocket.
As a benefit, it also has an MP3 player so I don't have to bother with a iPod either.
My next phone I would like to have GPS, tied to the camera, with a 3G connection for mobile updates. GIS FTW!
Wetzel