He is NOT going to find a NEW 6.2MP digital reb w/ lens for 400-500. If you do let me know, and I will sell my 7.2MP Casio EX-Z750:
This camera can be had for 375-425 in the states, sometimes with bonuses like a small sd card.
Go to dpreview and this is pretty much the leader in high megapixel compacts.
The images have very little noise, the built in best shot modes cover most situations with very little guesswork, and the robust manual setting let you make your own best shot modes from the metadata of previously taken jpegs and save them on the camera.
The autofocus is accurate, but sometimes will miss in light conditions I am not sure I would term as low. This in general is the flaw of the camera. It handles well outdoors, but the low light indoor performance, even when toying witih manual settings, could be better. Alot of this has to do with the flash being a bit under powered. If you plan to take pictures indoors, make sure that you are close enough to the subject that the flash will illuminate them. I would not expect great results more than 8-10meters away.
Alot of the perks I find quite useful. It has a built in passport photo mode, which will properly propotion a headshot and then matte in on a standard size photo in various required sizes.
It takes MP4 video at 30fps 640x480. I have burned some of the video on dvd, and it looks surprisingly nice on tv. Obviously there is some noise and grain to the picture, but for a digital camera it is great. The microphone is also excellent. It will not distort next to very loud sound sources (ive used it in clubs and it doesnt thud in the loud like, say, a canon - not a very scientific description i know, but loud sources usually overwhelm digicams).
Build quality is excellent. It feels small but sturdy in your hand and gives you a sense you know you arent going to break it.
The LCD is clear, and responsive. It does not blur when playing back movies.
Finally, the UI is the same as all the other exilims. One of the things I like the best is that it keeps previewing images off of the shot mode selection wheel. Playback and Capture are controlled by different buttons next to this wheel.