Forgot to add, there is that phrase, "you get what you pay for" I have an old Sony digicam called the Mavica. It's not even a 1megapixel camera, but it still works (as long as your computer still has a floppy drive that is!)
As far as the mega-pixel range, it can depend on what you intend to use the camera for. I bought a couple of Olympus C-2020 Zs (one to fix the other). They max out at 2.1 mega pixel. I use it for a specific purpose that is very good at.
If you are just going to post pictures on the web, then you really do not need a powerful camera. If you are going to print some for family or friends and want 4x5 prints, then 3mp or 4mp should be fine. If you are wanting to print larger images for Sale, then of coarse, look at a high mp camera.