Quite agree, PPT. I have just bought a s/h Kodak 280, 2.1 megapixel, 750 shots taken (it's got a counter), zoom lens, plus CompactFlash card reader, plus extra CompactFlash card, 18 months old. Original cost- £550. Cost to me- £150.
Now, whilst I still feel that a medium quality 33mm SLR will give much better results quality-wise, the very reasonable quality of this camera along with the sheer convenience of the digital features, shines through (but not for £500-900!)
Definitely, older cameras are a very viable option.