My friend is buying a digital point-and-shoot camera, which he wants to use to click family pictures including a lot of pictures of their newborn son.
What camera qualities should he be looking for while buying?
Family pictures aren't really a subject that requires a special camera model or feature. Newborn photography can be quite challenging on the other hand. Features that will be important to this type of photography would be all of the features that you would buy a DSLR for - large apertures, off camera flash, fast continuous shooting, low noise high ISO performance, and near instant shutter lag.
You aren't going to find all of these things in a point-and-shoot camera, but you can find things like a f/2.0 lens, better high ISO performance, and a hot shoe. Another thing you could look for is getting a fixed lens point-and-shoot that doesn't extend the lens each time, and that will speed up the time till the first shot. But most of these are either the very basic entry level models with much smaller apertures, or the bigger PEN sized cameras.
Newborns don't move that much, but large apertures and bokeh is nice for this type of photography. When they are awake, they flail their hands and feet around so much, that it can be difficult to get a sharp image indoors without additional lighting. Not to mention in only a few months they will start moving QUICK! That is when the high ISO performance will really come in handy.
This list may SEEM obvious. A camera that:
Takes good quality photos,
is easy to get action shots with (babies can change faces faster than most people can think :-) ),
Is easy to get photos from
Uses standard accessories (batteries, memory cards).
Has an adequate flash.
Megapixels (MP) do not matter !!!!.
Too many MP are bad. When you could choose between 1.2,3 or 5 MP cameras then the higher MP made sense. Now that you can buy 8 10 12 14 ... MP point and shoots resolution has gone far beyond what is reasonable for the sensor sizes and effective quality in given light conditions is falling as MP rises. MP madness set in long ago and the rush to more MP is driven by marketing and perceptions and not by reality. You can get superb photos with 6MP. Any more than that in a P&S will cost you noise quality. More MP per sensor size = more noise, or more light needed.
The exceptions to MP madness are cameras that use large sensors - APS-C or similar. Some cameras that are near to the "point and shoot" definition use these but they are more expensive.
Look at good review sites. I consider that e.g. DPReview to be superb and Steve's Digicams to be less professional but have a wider range but there are many more and people will have their own preferences. Note that the "reviews" from many sites are utter rubbish. Be discerning.
As above - 6 MP can give superb photos at 6 x 4 and still excellent at A4 (~ 12 x 8). Even lower can be OK (4MP+) but few go so low any more.
THE biggest quality feature you can get is a much larger sensor than most point and shoots offer. An APS-C sensor (as used in most DSLRs) is available in an increasing number of tween market cameras and offers vastly superior noise capability or the ability to use faster shutter speed or shoot in lower light.
Being able to take the baby you see and not the one half a second or a second later is vital. Many P&S cameras have terrible shutter lags. You can learn to compensate somewhat but its never as good as instant response. Shutter response should and can be so fast that you feel it has anticipated you.
Eye level viewfinders are far superior for movement shots. Live view / rear LCDs are useful and often the best way of framing and taking a picture, but when the going gets tough, having a "real" viewfinder helps heaps. I say "real" as this can be electronic if it is good - its the welding of the camera to the head that helps.
Repeat rate - it helps greatly to be able to take 2 or 3 or ... 10 photos in quick succession to capture that special moment. Having to wait a second for the next shot is unnecessary. Some cameras will have a finite buffer size and as long as this is large enough to suit your needs that's fine. Some cameras will be able to write to card semi continuously - so much the better.
Features - Face recognition, smile recognition, panorama, ... . All good BUT aim at quality first and fancy features second. YOU know when your baby has smiled. A camera may not.
Flash - Have a "good enough" on board flash. Most are OK enough these days. Being able to trigger external flashes is very useful as you get more serious - but a good entry level DSLR will probably be a better choice than specing up a P&S.
Focal length range: Optical zoom is essential. 3:1 is the utter minimum, 10:1 is nice and more is available and very nice to have if price allows. Macro ability (very closeup shots) is nice but not essential. Ultrazoom (wide to telephoto zoom range) is very nice to have. The baby in the cradle now will be the toddler over there next year and the child with the cat or dog or friends WAY over there very soon. The ability to get close from a distance rapidly becomes increasingly useful. Be sure that this is optical zoom - digital zoom can be achieved by cropping afterwards. The more zoom the better all else being equal. Top end quality will usually suffer somewhat but you can choose whether to zoom that far if you have it - if you don't have it then you can't use it. Wide angle is nice if available. Being able to take whole room scenes (parties, baby's bedroom, groups at play ... is fun and good if the facility is there. Most lenses have a bottom end of around 28mm in 35mm equivalent terms. Anything less is a bonus. Some systems or after market sellers offer add on lenses to give extra telephoto or wide-angle. Many of these are junk. Good ones tend to be expensive but expensive ones may not be good. Wide angle is probably a more useful add on than telephoto.
SD card memory, probably. Avoid proprietary formats, all else being equal. SD cards are cheap (probably the cheapest) and widely available, they will plug directly into many PC's, small cheap card readers are available that allow them to be plugged directly into eg picture frames etc. XD is very expensive per GB. Others in between.
Be sure the camera supports large capacity cards. Some don't.
At first at least buy a highish speed card. Say SD 10X. This may or may not make a difference compared to say 4X older spec cards or whatever depending on your camera but at least try a fastish one to be sure.
Integral video is a really really good idea. VGA quality is good enough (although some will disagree). HD is better if price is right. If you can get MPEG file format it's the best. Other formats OK as long as there are no quality compromises. (MP4 MPEG has good quality at high compression rates.) The Sanyo XACTI cameras (more aimed at video than still but do both well enough) use MP4. Some others do.
Battery - all else being equal - a camera that uses AA rechargeable batteries is preferable, e.g. Canon A series. But many others. This allows you to always be able to have a battery available (Alkaline of necessary), not have to buy expensive custom batteries, go away for a weekend or longer and charge your batteries in a std AA chargers or buy more at not too bad a price. NiMH are the std rechargeable battery of choice. Low self discharge AA NimH are preferable.
Download - USB download capability via cable highly desirable - fairly standard.
Quite a lot more could be added, but I'll see how that's received. I may add more if it seems useful so far.
Any recent camera from an actual camera manufacturer (a company that also makes interchangeable lens cameras) will be ok.
You should ignore mega pixels (any modern camera is going to have enough megapixels) and digital zoom (that usually is just cropping) those doesn't mean anything.
Everything else is a tradeoff - for example 10x zoom is great but that zoom lens is going to be big and the camera isn't going to fit in your pocket.
If you can test the camera before buying take some pictures indoors under your normal lighting and make sure the picture is good with no excessive noise, check that the focus is fast enough and the shutter lag (time between pressing the shatter and taking the picture).
It's basically the same advice I gave on the DSLR recommendation question - get a camera that is good enough and spend your time taking pictures not reviewing cameras.