Compact - This is the “beginner” class of cameras commonly known as “point-and-shoot.” If you want the camera to do everything for you... at minimal cost... this is the camera for you. I use the term “beginner” loosely though. Compact cameras are great when you want a camera you can conveniently carry in your coat pocket.
Advanced Compact - These cameras are for the more serious photographer who wants the features of a DSLR, such as image quality and flexibility, but in a smaller package. The Advanced Compacts will cost a little more and be a little heavier. Some of the Advanced Compacts even come with add-on lens options and off-camera flash!
Digital SLRs - SLR stands for Single Lens Reflex. These are the big boys of the camera world. Stepping up to a DSLR opens the creative floodgates. Interchangeable lens, sophisticated in-camera light metering, wider dynamic range (detail between the highlights and the shadows), and better sensors are just some of the benefits. DSLRs are more expensive and bulkier then the Compacts. I believe a lot of people who purchase DSLRs never really learn how to use them to their full potential (there is a Photog Class on that very topic called “Digital SLR In-Depth”).
So which one is right for you? Answer that question and you can eliminate a good chunk of the choices at the counter of your local retailer.
Do you want a camera you can keep in your shirt pocket or your purse that you can pull out and snap a picture with whenever the moment strikes? Consider a Compact.
Do you want a camera that you can get a little more creative with but don’t want to spend the money or time to master a DSLR? Consider an Advanced Compact.
Do you really enjoy photography and want to explore your creativity in greater depth? Consider a DSLR.
Now that you have an idea of the type of camera you want. Let's look at the factors that go into choosing the right camera for you. The next lesson in on understanding resolution.