Whether viewed on a computer screen or printed, a photograph is made up of tiny dots called pixels. With regard to digital imagery, megapixel (or MP) is used to refer to the number of pixels the camera is able to capture. "Mega" indicates million, so one megapixel equals one million pixels (i.e. dots). The higher the number of pixels in an image, the higher the quality of detail the picture will reveal.
Armed with this information, it is easy to conclude that resolution is a very important factor to take into account when deciding what megapixel level to go for when choosing a digital camera. However most people get to this point in their study of digital cameras and stop there, concluding that since a camera that shoots at 4 megapixels will theoretically produce much better pictures than a camera that shoots at 2 megapixels, they need to spend the money for the "better" camera. For the average digital camera user, this may not be true.
What kind of pictures do you take?
Think about how you will be using your camera. If you are somebody who is buying a digital camera solely to take pictures for online use (for example, you want to take pictures of stuff to sell on eBay or to use on your own website, or you just want to e-mail snapshots of the kids to Grandma Lulu) and you will rarely, if ever, want to actually print pictures, then you can probably get away with buying a low-end digital camera with 1-2 megapixels.
If you will be using your camera to take informal family snapshots and anticipate printing mostly standard 4x6 photographs, you will probably want to go with a 3-4 megapixel camera. This will also afford you enough resolution to create nice-looking 5 x 7 enlargements, as long as you don't do much cropping and enlarging.
If you anticipate wanting to print larger photographs, such as 8 x 10's, or will be doing a lot of cropping and enlarging, you may need to set your sites on a camera in the 5-8 megapixel range, as the resulting resolution will offer much more flexibility when it comes to imaging manipulation and printing.
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