The Sony's are reliable (except the DSC-S series, which fvcking blows), but picture quality and performance is not great. Also, they've made recent units unnecessarily complicated to use any of the more advanced features as well. Even the menu is a chore where it wasn't on older models.
The Memory Stick Pro Duo cards have dropped significantly in price and, while they're not as cheap as SD, the price difference isn't large enough, IMO, to sway one over to an SD-compatible camera.
Personally, I'd go w/ Canon. As Faulkton mentioned, the SD870 IS is incredible, though above your budget. Definitely an awesome camera, though. Closer to the $200 mark, you have the A590 IS, A720 IS, and SX100 IS from Canon. All of them have pros and cons, though.
The A590 IS has the lowest feature set and the least zoom, but is the most compact of the 3 and has the best optical viewfinder (great for shooting in bright light).
The A720 IS is probably the best all-around, offering a wide angle lens with a decent amount of zoom (6x), a fairly compact body, optical viewfinder, etc. The flash recharge time is about the only fault I've found, as it's slower than the other 2 and the optical viewfinder isn't quite as clear as the A590's, neither of which will make much of a difference to your average amateur photographer.
The SX100 IS offers up the most zoom (10x, great for wildlife) and still maintains a fairly compact body, but lacks an optical viewfinder (which may make it difficult to get the shot you want in bright light), doesn't have a particularly wide angle (not great for indoor shots), and lacks the ability to add on additional lenses (adding a wide-angle adapter would help significantly w/ indoor shots, though it's expensive).