Working on the assumption that you are never going to enlarge your prints any bigger than A4 we recommend to customers a minimum of 3.2megapixels, this also allows for a bit of playing around in photoshop etc.
As for optical viewfinders i don't think i've ever used mine on my Nikon. I have a swing out screen that will tilt and i use that for everything. It's especially good at low level shots that i used to have to scrabble all over the ground for.
To be honest ANY of the ixus range of cameras are good, it's down to personnal choice, size of wallet and how each one feels in your hand. We sell the entire range of Canon cameras from the little Powershot A400 at £75 to the EOS1-Dmk2 at nearly £6000. Anything with a Canon or Nikon badge on works for me. We sell mostly Canon because we also sell Canon printers (our main business) and that is for the simple reason, they are the best, best printing resolution, best value for money, cheapest to own and most important for us, we don't get any back in the shop with problems. This also may be a considering factor, are you going to print the pictures yourself or take to a third party to have them printed? The printer you use can almost be as important as the camera the picture was taken on!!
£150-£250 is a good budget for a quality camera. Have a play with a few models if you can. See if there are any levers, dials or switches that could be caught or broken off easliy. How do the dials feel? positive clicks or cheap and nasty? If they start off slack they aren't going get any better!!!
Look into what the body of the camera is made of Plastic or Alloy? A metal body will be longer lasting and protect the inner parts. Have a look where the batteries and memory card slots are, what are they made of? are they made of plastic with flimsy catches or in the case of mine plastic battery cover but metal memory card cover.
Memory cards- yes 1Gb is available at good cheap prices. However if you end up with a high megapixel rating be aware that the images are large (in my case 22.5Mb per photo) the cheaper memory cards take forever to write the information to them. As it is i use professional quality guarenteed for life cards and it still take 15-20 seconds to write the information to the card. There are now faster than that available and i will be updating soon.
Oh and video- practically every digital camera does video in one form or another. It is usually not very good quality and not worth considering in the package. If you want video...buy a video camera!