Film and Digital
While most lowend, consumer grade, snapshot-type digital cameras are not nearly as versatile as even the lowest grade film SLR, once you get out of toys r us land and into a higher end digital SLR, the differences in features are suprisingly slight. The real issue here is not one of film versus digital, but of what the vast majority of people want to do with their cameras. Most people just want the memories, not the art. There is nothing wrong with this initially, but once you start asking a Sony Mavica to start producing film-like picture quality over a wide range of conditions (such as freezing fast action, controlling depth of field or shooting more than about 2 frames per second of high resolution sequenced stills), you'll be outside the envelope of what the camera was designed to do.
The price of entry into a digital equivalent of a full-featured film SLR is indeed high, comparitively speaking, but for those who are used to having the adjustability and versatility of the film cameras that they've grown accustomed to, the price difference may be acceptable. The tradeoffs will come in the form of having to drag around a bag full of more application specific lenses and accessories as well as potentially putting an expensive camera in harms way ( and also, getting grilled for half an hour at customs when they see that you're a private citizen with more elctronics in your bag than the CIA).
Prices are continuously coming down. My first digital SLR cost me 10 grand, and that was only five years ago. Today, you can get better cameras for 2. In general, fixed lens cameras on the low end will eventually disappoint, if you start asking them to do anything more than taking pictures of your cat sleeping or the kids sitting on the front stoop. Building versatility into any camera will ultimately result in compromises. My friend just got a "prosumer" camera and was touting the 10X optical zoom that it featured. We tried it out and even he was severely disappointed at the results. Later, he found out that the camera manufacturer had adapted a camcorder zoom lens to cut costs (you can afford many more optical compromises with moving pictures than stills).
Stay away from cameras that have those preprogrammed sybols that denote things like landscape, night time and portrait modes. Redeye reduction flashes are merely bandaids for the flash being too close to the lens. Above all, learn the simple rules that are governed by basic common sense and rudimentary junior high school physics. You'd be very surprised what a pro can do with an entry level camera under controlled conditions. Once he or she went beyond those conditions, however, they'd know when to quit and out would come the big guns.
Finally, the new digital SLR's handle and work just like their film cousins. My digitals have all of the features that my film SLR's have. Their ISO range isn't as much, but the differences that make them digital are so trivial that if I handed my D1 or D1X to someone who had always used an F5 film camera and had never even heard of digital, the only time they'd be surprised was when I had to take the Microdrive out of it instead of the film. Same lenses, adjustments, speed and features.
Don't get me wrong, the little guys have their place. We have several small digital cameras that we use for outdoor activities like snowmobiling and such. They're great for preserving the moment, but you won't freeze wood chips coming off of a full race 084 under cloudy conditions from 30 feet either. Everything has it's place.