Red Eye is a function of reflected light. Red Eye reduction systems can help by closing down the pupils, but the problem is caused by cameras with a flash too close to the lens. A flash too close to the lens means there's less of an angle and more of the reflected light is captured by recording medium...photography is after all, painting with light, so the camera's just doing its job when it captures 'red-eye'.
For a small camera, there's no guaranteed way to eliminate red eye. If you have a red eye reduction function and it's not too terribly annoying to your subject(s) and the people around, be sure to use it. If you're looking for a new camera though, look for one with a flash that is as far from the lens as possible. An example of how Kodak helps with red-eye is their 'cobra hood' flashes. The flash pops up well above the lens and from my experience with our kodak aps (before we went digital) is it does help. I'm sure other manufacturers do similar things to remove the flash from the lens.
As to going digital, I think most consumers will be digital within 5 years...at least in the US. Most people aren't photographers, they're people who want to capture moments in their lives. They want snapshots. Digital cameras do this fairly well. Today's printers also make great prints, and the printers (well, the inks) are finally beginning to rival traditional silver halide in terms of longevity. 35mm is still 'better' overall than digital, but that will change as the technology continues to develop, but right now I think digital has the edge over film for the typical photo taken by the typical human being. My only major problem with digital cameras is this obscene need to keep making the cameras smaller...with the requisite smaller buttons. My fat fingers have a difficult time with most digicams right now.
My recommendations for a digicam for snap shots are: at least 3.0 Megapixels, a decent zoom (at least 3x, but keep in mind your own feet are often a better 'zoom' than the one in the camera for snapshots), uses compact flash cards, and one that uses AA batteries. If you don't know, batteries are chewed up by a digicam so being able to use AA rechargeables is a major, major savings.
My anecdotal story: Our last trip 'Home' we took wifey-poo's family for a week at WDW. We took the digicam and wound up taking 1257 photos, not counting the hundred or so I know I deleted. The savings in processing alone paid for the camera, and having the photos in an electronic format has saved me from either scanning all of the prints or getting a film scanner and scanning them. For sure, the resolution isn't quite as high, but for printing the 5x7's and smaller, its more than adequate for a scrapbook or to hang on the wall.
Regardless if you use film or go digital, do yourself a favor and learn a little about photography. There are lots of sites on the Internet where you can learn how to take better photos. I know Kodak has one that I thought was pretty decent for the normal human being.
Hope this helps,
Joe
