For 12x optical zoom, you're likely going to have to get a slightly larger form factor than the typical point an shoot. This Canon is a very nice model and is sort of positioned in the middle of their lineup - between their SLRs and smaller point and shoot cameras.

The camera Stanley recommends is nice, but if you don't mind spending the money, I'd recommend getting into a digital SLR. I absolutely love my Rebel and you can get a ton of different lenses for any focal length.

I just purchased this a week ago for myself and it's been fantastic. It's not cheap though but if you're looking into a DSLR, I would highly recommend you give this a look.

Budget? 7-12 optical zoom is pretty rare for regular digital camera, I think you may want to try a digital SLR like this Nikon D40x... or similar D50. If zooming (telephoto) is what you want, then that kit 18-135mm lens is pretty good. If that's not enough, I would buy the camera body only then go for a Nikon 18-200mm f/3.5-5.6 VR (vibration reduction) lens.