You won't be disappointed in the Pentax Optio. Sure, it can't compete with an SLR, but, it's small,lightweight and waterproof to 10 feet or so. Underwater stills and video may not be quite professional quality, but, they are pretty darn good. Daniel has probably seen much more of my footage than he really wanted to, but, was too polite to say so. I've had my W20 a little over 2 years (with no problems) and Linda has a new W30. Four of our friends bought Optios after seeing what mine can do. Over the years I've missed a lot of impromptu photo opportunities, simply because I couldn't make the necessary camera adjustments in time. This little rascal is sure enough point-and-shoot in full auto mode. If you're in the mood for creativity, there are plenty of manual mode adjustments. Even though the cost is above what I consider disposable, it's not enough to cause severe financial anguish if it happened to get smashed.
Batteries: I would recommend http://www.power101.com
The cost is a fraction of OEM battery cost and performance is about equal. I carry (4) on our annual camping trip at Elkmont.