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keep an eye on craig's list for a used replacement for you!
18x zoom is really good. I am thinking of getting the Canon Powershot SX10 with 20x zoom as my backup camera, but it's about $350 so it's not cheap.
I am also thinking of getting my son a camera, but I haven't said anything to him yet. It all depends on what I get from the insurance.
we ended up getting quite a nice little check for our rear-ender in my husband's truck
Cait's Olympus was somewhere around $450 almost two years ago...I'm sure it's come down since then...I think you're probably right about going new-don't want to inheirate (spelling?) someone else's problems...