Today's digital cameras are delivering high image quality, full complement of hardware features, and competitive pricing compared to 35 mm film cameras. CMOS chips are significantly cheaper and consume less power than CCDs, but they are less sensitive to light, so the image quality in low light conditions is lower. Camera's resolution is the number of pixels it can capture horizontally and vertically.
More pixels mean better quality.
If you need to print out a 4x6 print, 640x480 resolution is enough, but if you want an 8x10 print, you'll need a higher resolution. Greater the resolution, more space is needed to store the picture. You can ignore interpolated resolution figures stated by manufacturers. Interpolation is a process used by photo editing software in which a computer chooses an appropriate pixel color based on colors of surrounding pixels. This process allows enlarged photos to look smooth, even if they were made at lower resolution.