Megapixels: Camera companies keep advertising more and more megapixels -- 10 is the new premium number this year. But unless you're blowing your pictures up to poster size, you don't need more than six or seven to get quality 4-x-6 or 8-x-10 prints.
Optical Viewfinder: As cameras get smaller, a feature that's often left off is an optical viewfinder (the window you hold your eye up to on the back of the camera). But a viewfinder comes in handy on a sunny day at the park when it's hard to see the LCD screen.
Image Stabilization: If your camera has a big optical zoom, you're definitely going to need image stabilization to guarantee an unblurry shot. And make sure it's optical stabilization, not electronic.
Autofocus Assist Lamp: Another feature that helps you shoot clear photos is a low red or green light that the camera shines whenever you prefocus (by holding the shutter release halfway down). It allows the camera to detect how far away the subject is and to lock in the focus in low light (think blowing out the birthday candles).
Shot-to-Shot Time: This is a measure of how quickly your camera can take photos in a row. A good shot-to-shot time (less than two seconds, without flash) is useful when you're trying to capture action -- your baby's first steps, for example. This number isn't usually listed in the specs, so the best way to tell is to play around with the camera in the store. And try it with the flash on; the flash-recharge time usually makes the delay between photos even longer.
AA Batteries: Look for a camera that takes AA batteries rather than the special -- and more expensive -- lithium-ion camera batteries that many cameras use. You should definitely buy rechargeable AAs called NiMHs (look for 2500 mAh or higher). But if your battery dies while you're out, no worries: You can just pick up some regular AAs at the drugstore.