Go with Canon. We just got my mom, on Mother's Day, the Canon Powershot SD980 IS. It has 12.1MP, a 3" Touch Screen Display and it's full of features that makes it easy to use:
-Record HD videos
-Connects to HDTVs via mini-HDMI
-Optical image stabilizer prevents blurry pictures
-5x optical zoom & 4x digital zoom
Literally, my mom turned it on and she was taking pictures & videos the rest of the day. Super easy!!
I got it at TigerDirect. Here is a link: http://bit.ly/bB1Z97
It's a bit pricey at $300, but I think it's VERY worth it. Oh and the software to download the videos and images is good, but you can easily just plug the camera into your computer, and drag & drop into a folder.