Most of my coworkers who are not photo nuts (unlike me) have followed a few general rules and had great results. Here they are:
-Stick to Name brands. Don't buy on price alone, otherwise you might end up with exactly what you paid for, bad photos.
-Get a 3+ Megapixel digital camera. The prints and screen quality will be good quality for standard size photos. You can get digital pictures printed cheaply at both Sams and Costco.
-If you do any outdoor or even standard photography and the only thing separating two cameras is minor stuff and zoom go for the higher optical zoom. There are a couple cameras out there with 10x optical zoom, which makes them pretty awesome for getting really close to the action. Ignore Digital zoom, it doesn't do you any good especially at lower MPixels (at higher MP it can be useful).
-Compact Flash is the cheapest media. If you get a choice and there isn't a signifcant difference in cameras get Compact Flash. Doesn't matter if you buy a <200 dollar digital camera if you have to buy expensive media for it (such as memory stick, which can be twice as expensive as CF in some cases).
There are other opinions on battery types, etc. Most of those are individual choices, not really something to be concerned about unless you really want to stick to rechargable AA's, etc.. Note that most digital cameras will not take alkaline batteries and be happy with it. They are best served by NiMh or LIon.
Before I bought any digital camera I would read the reviews at the following sites - ignore the technical jargon if you don't care and skip to the conclusions:
http://www.steves-digicams.com
http://www.dcresource.com
http://www.dpreview.com (the forums here are great!)
Regarding the USB Connection:
Most (maybe 99%?) cameras sold today have USB connections. If they don't get a cheap media reader for <$20 on sale at compusa/bestbuy and just plug the media into your computer rather than the entire camera. I have found this to make getting pictures off of the camera much easier since you can just stick the media into the reader and copy it over just like it was a file on a floppy. One thing to note about this is with many cameras after you are done copying the files remember to reformat the media after you stick it back in the camera to avoid issues with getting your files off later.
Hitting your $200 price point should be pretty easy with the requirements listed. Most cameras I help friends purchase these days are in that $150-300 range and have great image quality.
Hope this helps.