Vicarious is designing artificial intelligence software intended to learn to “see” and recognize objects and things just as the human brain does from the time of a baby’s birth. This is much more complicated than designing a program to recognize a shape, say a shoe, and then find many other similar shapes, according to Vicarious.

The company just raised its first institutional funding led by Founders Fund with participation from Felicis Ventures; Dustin Moskovitz, co-founder of Facebook; Adam D’Angelo, co-founder of Quora and former CTO of Facebook; and Joe Lonsdale, co-founder of Palantir.

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Dennis Durkin, who serves as chief operating officer and chief financial officer for Microsoft’s Xbox video game business, told investors Thursday that Kinect – which allows users to play video games without so much as a joystick – presents business opportunities for targeted game marketing and advertising.

Kinect is a camera peripheral that plugs into the Xbox 360 console and allows players to control games with only body movements. The system uses facial recognition technology to sign in players and match them with their avatars and profiles. But the technology can also be put to use beyond those purposes, Durkin said in a presentation at an investors conference sponsored by BMO Capital Markets.

“We can cater which content we present to you based on who you are,” Durkin said. “How many people are in the room when an ad is shown? How many people are in the room when a game is being played? When you add this sort of device to a living room, there’s a bunch of business opportunities that come with that.”

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That prompted the website of Consumer Reports to run its own tests to see if it could duplicate Kinect’s alleged discrimination. The publication just posted its results under the headline, “Consumers Reports debunks the ‘racist’ Kinect.” (That headline was a bit of a straw man since GameSpot didn’t say definitively that dark skin was the cause of the problems, much less claim Kinect was racist. Plus can objects be racist?)

Consumer Reports said they found the problem GameSpot wrote about was related to low room lighting, rather than skin color. Like GameSpot, Consumer Reports found the issue only occurred with Kinect’s facial recognition, a feature that allows players to automatically log in to their Xboxes when they stand in front of Kinect’s camera to load their personal gamer profiles. Lighting conditions didn’t affect playing actual games with Kinect, Consumer Reports said.

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The SEC filing revealing the deal between the two companies is about as brief as they come and its terms are confidential, so it’s impossible to say definitively what Apple (AAPL) is after here. Given Rovi’s business, though, it seems likely that Apple is after the same interactive television program guides the company licenses to digital cable/satellite providers and set-top box manufacturers. Certainly, that’s Piper Jaffray analyst Gene Munster’s theory. “We believe this announcement is further evidence that Apple is developing live TV and DVR features for its Apple TV product, and will likely launch an all-in-one Apple Television in the next 2-4 years,” he said in a note to clients today.

Makes sense, right? Of course it could also just as easily be evidence that Apple is planning to add device-to-device media synching to its hardware. Or simply an indication that Rovi holds a core patent in some area that Apple’s working in.

Polar Rose’s offerings don’t require as much processing power as other recognition engines, making them well-suited to mobile phones and the like. More interestingly, they’re powerful enough to identify faces in live photos and video (see clips below). And there is a world of potential applications for that if Apple (APPL) were to incorporate it into iOS, whether it be as a further enhancement to the Faces technology used in its iPhoto and Aperture applications or as some sort biometric security measure. Recall that one early prototype of the iPad was believed to use a camera and facial recognition to differentiate between different users’ faces, switching out personal settings each time the device changed hands and allowing it to be shared within a family.

Is Polar Rose the acquisition that could make that a reality? It’s certainly possible–assuming there is, in fact, an acquisition. And at this point, that’s unclear. Neither Apple nor Polar Rose will comment on the rumored deal. If they do, I’ll update here.

Also totally uninteresting as far as eyes-only “vision” documents go (click on images below to enlarge). Their big revelations? Windows 8 will boot more quickly than its predecessors. It will likely include an app store. Instead of using a password, it might use facial recognition to log in users. It will be more closely connected to the cloud. It will be more energy efficient. It’s intended for a variety of different PC form factors–slate, laptop and all-in-one. And finally, it’s being developed with an eye toward aping the “it just works” simplicity and quality for which Apple (AAPL) products are known–“This is something people will pay for!”

Improved energy efficiency! Faster start-up! An app store! Support for slates!

Fascinating.

So the next iteration of the world’s most popular operating system will be an evolutionary one picking off low-hanging fruit was left after Windows 7? Tell us something we didn’t already know.

“In this 10-year time frame, I believe that we’ll not only be using the keyboard and the mouse to interact, but during that time we will have perfected speech recognition and speech output well enough that those will become a standard part of the interface….And with the digital cameras that we’re seeing on these machines, with the software behind them, at a minimum they’ll be able to recognize when a user is there, who the user is, what gestures they’re making, and have that be part of the interface.”

– Microsoft Chairman Bill Gates, 1997

“Bill Gates: Imagine a game machine where you’re just going to pick up the bat and swing it, or the tennis racket and swing it.

Walt Mossberg: We have one of those.

Kara Swisher: It’s called a Wii.

Bill Gates: No, that’s not it. You can’t pick up your tennis racket….That’s a 3-D positional device. This would be video recognition. This would be a camera seeing what’s going on.”

– Microsoft Chairman Bill Gates, D5, 2007

Microsoft’s new Kinect motion control system has been squarely targeted at the gaming market, but the company has far greater plans for it: To bring to fruition a vision that Chairman Bill Gates has been talking about since early in the decade–a “disappearing computer” at the heart of the “digital home.”

By extending Kinect’s motion and voice control beyond gaming–to music, video and all manner of media content–Microsoft (MSFT) is positioning it as a new control paradigm for the digital living room, one in which facial recognition logs us in to Xbox Live, voice commands operate an Xbox-controlled home music system and a few simple gestures allow us to select and stream a movie from Netflix (NFLX) or watch a game on ESPN.

“With Kinect for Xbox 360, we’re making entertainment controller-free, simpler and more social than ever before,” Marc Whitten, Microsoft’s corporate vice president for Xbox Live explained during the Kinect launch event Monday. “Imagine a world where you can watch a movie without a remote, play a game without a controller, all in the comfort of your living room.”

Gates was imagining just that more than a decade ago, and now it seems his digital living room is finally here. The question now is: Where does Microsoft go next? If the company is able to establish the Xbox 360 as a central hub for home entertainment, will it set out on a more ambitious path? To bring the smart home into the mainstream with more accessible, intuitive home automation?

Its “Snowday” card is a snowflake-catching game, and if you have a webcam attached to your computer, you can play by simply sticking your tongue out and grabbing ’em.

The game starts by asking you to grant the cam access, then you center your tongue in the screen’s image (in mid-air–you don’t actually need to lick your monitor), and start catching falling snowflakes.

Players get points for each one and can advance through levels such as “Tongue-Tied,” “Sir Licks a Lot,” “Dr. Strangetongue” and the ultimate, “Baron von Tonguemeister.” The game ends by taking a photo of you in tongue-extended play, which you can then post to Facebook or Twitter. There’s also a “tongueless” version for players without webcams, in which you drag an on-screen tongue from snowflake to snowflake.

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Please see this disclosure related to me and Google.

Right now, BoomTown is sitting right behind the very affable Jason Hirschhorn, chief product officer of MySpace, who is here to make one of the many partner announcements with Google at its “search event” in Silicon Valley today.

I also ran right into Twitter’s Biz Stone at the coffee stand. He is also here to talk about the new features Google (GOOG) is adding to its search repertoire, although he is remaining mum until the program starts in five minutes.

It’s about real-time search, of course, given that the partners visiting today are all real-time search folks.

The confab–being held at the Computer History Museum near the Googleplex HQ–is essentially Google’s rejoinder to last week’s event by Microsoft (MSFT), which announced a bunch of new features for its Bing search service, including mapping updates.

Of course, because it is Google, the sound system rocks, the food is better and it is more overproduced than “Dancing With the Stars.”

10:13 am PT: The event is opened by Marissa Mayer, who runs search products and user experience for Google.

And it takes exactly 13 seconds for there to be a classic Silicon Valley buzzword. Modes! Translation: It is how we use the Web.

Mayer is outlining Google’s key components in the future of search. Along with modes, they are media, language and personalization.

“We are a company that likes to launch early and often,” she said, adding that Google has launched 33 search innovations in 67 days.

In other words, take that, Bing. Oh, dear, giant Google just boasted about its innovation cred and is apparently a little worried about weensie Bing.

10:18 am: Mayer welcomes Vic Gundotra, VP of engineering, who will talk about mobile search.

He begins by noting that no one knows where all the new innovations in computing will lead, much as no one got the Gutenberg press way back in the olden days.

Professor Gundotra then launches into a computing history lesson, with stops at Moore’s Law (better, faster, cheaper) and how one understood all the zillions of computing connections that would occur.

The “missing ingredient,” noted Gundotra, is the cloud.

Next, he moves to a demo to show where Google is headed. Gundotra nails a voice query on an Android phone about President Obama at the G8 Summit with the French president. Everyone cheers.

Gundotra now tries to top himself with a Mandarin query for McDonald’s in Beijing. He sticks it.

He then announces support for the voice search on mobile devices for Japan, bringing up a Japanese speaker.

One voice query is a very long one for a favorite restaurant in Tokyo near the Google office there. Does Google find it? Of course Google does.

“Our dreams at Google go way beyond what you just saw,” says Gundotra, who opines on a real-time interpreter on the phone. Of course, he demos the interpreter, which he said will show up sometime in 2010.

It works, again. Natch! These are big-brained dudes here at Google, so don’t mess with them.

10:30 am: Gundotra moves to locations, which he says will be a key element of future versions of Google search. You know, Red Sox comes up in Boston, data appear for nearby stores for digital cameras.

He shows off the “Near Me Now” feature, which is kind of like those many Apple (AAPL) iPhone apps, like Yelp. It explores stuff nearby. It will be available on Google mobile maps for Android right away.

Next, he announces a Google Labs project called Google Goggles, which takes pictures of something and then identifies it. I have seen this kind of thing in a lot of labs at various tech companies.

Gundotra, who is a slick dude at presentations, uses the example of being a wine expert without being one. He scans a wine bottle and then Google quickly shows info on it.

Oooooh, aaaaaah.

Gundotra uses the service to identify a Japanese landmark successfully.

Someday, he predicts, your phone will be a “mouse pointer” to the world.

10:42 am: Back to Mayer, who talks about media relevancy in search. Google Fellow Amit Singhal is the man on deck.

“What we’re going to announce today is one of the most exciting things in my career,” said Singhal, who first launches into a short history of information flow.

Campfires, more Gutenberg! Also some pictures of old Google servers. I feel so educated; plus, Singhal is pretty funny for a supergeek.

Now, he gets to the news: “We are here today to announce Google real-time search.”

The demo is launched and it shows news scrolling as it is produced. “This is the first time ever,” enthuses Singhal.

It looks cool, but reminds me a lot of old tickers that used to be in the newsroom at the Washington Post. You know, the kind of newspaper that Google is often accused of killing off.

Irony alert! I wonder if that will scroll up soon.

The scrolling also includes Twitter updates. One tweet by Googler Matt Cutts about the Google real-time search launch showed up immediately.

The latest results will be available on the search options and in preferences and will also be hyperlocal and mobile on the iPhone and Android.

“Real-time search becomes incredibly powerful, since it shows you exactly what you need in your geography,” said Singhal.

Singhal is a font of news. He also announces that Google Trends is moving out of the labs and will also show real-time results.

He launches into the “how” of how Google did all this. Well, it was really, really hard, said Singhal, because there are a badillion real-time pieces of data out there to analyze and render.

And which company, with its massive computing power, can make this relevant and hand over the info quickly? Three guesses, and the first two don’t count.

Recap: Real-time search, latest search option, update option, mobile real-time search and Google Trends in the real-time world.

“At Google we will not be satisfied,” said Singhal, until Google can get you info at the speed of light.

11:07 am: Just to stick a true fork into anything Microsoft could come up with, Mayer comes back up and announces Google’s Facebook, MySpace and Twitter partnerships as part of the launch of real-time search.

Facebook will be sending in public feeds and MySpace is providing all of them, as is Twitter.

Google now has eyes and ears, says Mayer. When it gets a whole body, get ready to run for your life.

Q&A time!

The first question is about whether Goggles could have facial recognition. Gundotra says Google could do that, but will not until the privacy issues are worked out. Operative thought here: Google is capable of doing this. Eek!

The next question is about advertising opportunities in these new features. Singhal does not really answer, but says businesses will develop.

The next question is about how much content Google is crawling. Answer: About a billion pages a day.

Gundotra adds that the first launch is only available on English-speaking locales. But it will move into other languages next year.

What about spammers taking advantage of real-time search? Oh, says Singhal, they will get a beat-down from Matt Cutts, who is in charge of spam-killing at Google.

Wouldn’t that make a good reality show? “The Spam Hunters!”

About questions on real-time partnerships, Mayer said Google wanted to be comprehensive.

Mayer will not disclose the details of any financial payments for these real-time feeds. Of course, Google is paying up.

And now a question about whether Google will limit development on non-Android phones. “Absolutely not,” says Gundrotra.

At last, a zinger question: Do you feel that Google will be responsible for the death of journalism and doesn’t that make Google a scary black hole of, presumably, evil?

Awkward!

Singhal casts about for an answer, which is mostly about bringing info to users, which is not an answer.

“It’s really about user empowerment,” he says. Uh-oh, we’re doomed!

Mayer jumps in nervously to shoot this meme down and says Google is about facilitation and not decimation.

The PR dude onstage also throws in the boilerplate about Google sending gazillions of clicks all over.

But the point is made: Today Google–which owns universal search–just made its big move in real-time search.

The next question is about the difference between Google’s practice of wanting people off the page and onto the Web and Microsoft Bing’s focus on topic pages of rich information.

Mayer is sticking with quick on and off for Google.

And what about junk information on the silly side that comes with more real-time search, like dead celebs who are not dead, or really untrue information on important issues?

It’s a hard problem, says Singhal, who says Google is working on it.

What about disabling the real-time updates rather than just being able to turn them on and off. Nope, says Singhal. Mayer notes that this may change.

But the truth is: With the big search giant jumping in, real-time search is most definitely here to stay.

Sony Ericsson filed a patent application with the U.S. Patent and Trade Office earlier this month for technology that would allow a device to create MP3 playlists based on a user’s facial expressions.

It may not work out for the strong silent types, but the premise of the technology is that a cellphone would take a photo of the user’s face, analyze his facial characteristics and tailor a playlist to suit his mood.

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When the moment comes to take the perfect picture of a snowy mountaintop, Fourth of July fireworks or soccer goal in midkick, most people forget about these features or don’t know how to use them. And while many digital cameras can now detect faces and make sure they are in focus, they can’t tell whether that face is smiling or not. The results aren’t bad, but they could be much better.

Sony’s Cyber-shot DSC-W170 uses Smile Shutter Mode to snap pictures when a subject smiles.

This week, I tested three new digital cameras that claim to do the thinking for you. Some digitally analyze the scene you’re about to capture, automatically choosing the setting that would take the best picture. Others can detect when a subject is smiling so as to automatically know when to snap the photo. One camera even attempts to digitally alter frowning faces into smiles, with amusing results.

I tried out Sony’s $300 Cyber-shot DSC-W170, Kodak’s $250 EasyShare Z1085 IS and Olympus’s $200 FE-340. Only the Sony (SNE) includes all three of the aforementioned features; the Kodak (EK) has scene detection, and the Olympus (OCPNF.PK) camera has built-in smile detection. I found the automatic scene detection offered in the Sony and Kodak cameras to be the most useful feature for everyday photos. It improved my photos and didn’t require any extra adjustments. I handed the cameras to other people to take pictures, without having to change any settings.

The automatic smile detection offered in the Sony and Olympus cameras was fun to use and could be especially helpful for families whose young kids never seem to smile at the right moment. But it didn’t work consistently and had trouble detecting my bearded boss’s smile and even that of a beard-free colleague.

I found Sony’s frown-fixing tool, which is called Happy Face Retouch, to be rather unusual. It took already captured images of my friends’ faces and turned their frowns or ambivalent looks into smiles, but didn’t adjust the subjects’ eyes. Though this was good for laughs, the eerie-looking grins pasted on faces reminded me of painted-on clowns’ mouths. And some attempts to retouch a face couldn’t detect the face to alter it. But a handful of the Happy Face Retouches looked somewhat natural.

Similar Specs

These cameras boast many similar specifications. All three use 5x optical zoom lenses, and the Sony Cyber-shot DSC-W170 and Kodak EasyShare Z1085 IS each have 10.1 and 10 megapixel image sensors while the least expensive Olympus FE-340 has 8 megapixels. The Sony and Olympus both have generous 2.7-inch viewing screens and almost identically sleek builds, though the Sony is the only one of these three cameras to have an optical viewfinder.

The Kodak’s viewing screen is slightly smaller than the other two digital cameras, measuring 2.5 inches, but its build isn’t nearly as compact as the others. It reminded me more of small, high-end SLR camera, with its comfortably large hand grip, a settings knob on the top edge of the camera, and a protruding zoom lens.

Sony’s Happy Face Retouch feature digitally changes facial expressions into smiles, but all it did was make me look unnatural and awkward.

Kodak’s EasyShare Z1085 IS takes Secure Digital (SD) memory cards, which are more common than the Memory Stick and xD cards that work in the Sony and Olympus cameras, respectively.

The Kodak and Sony digital cameras have different names for their automatic scene-detection features. By default, the Kodak camera works in Smart Capture Mode, which includes intelligent scene detection, capture control and image processing. I focused on the camera’s scene detection, which automatically determines whether the photo should be taken in Macro, Text (for shots of text in a book, for example), Face, Landscape or Night settings.

Icon on the Screen

I snapped pictures around Washington, D.C., noting a tiny icon on the camera’s screen that indicated which of the five scene modes was being used to capture the photo. A flower icon indicating Macro appeared on my screen when I stooped to get a close-up shot of a tulip, and an icon of a dark sky and stars showed on the screen when I took photos at night. The camera’s flash, focus and exposure changed according to the type of photo.

The Sony camera uses what it calls Intelligent Scene Recognition to decide which settings should go along with certain photos. Like the Kodak, icons on the Sony’s screen indicated the scene settings that were automatically deemed appropriate, including Backlight, Backlight Portrait, Twilight, Twilight Portrait and Twilight Using a Tripod.

The Sony’s Intelligent Scene Recognition isn’t on by default like Kodak’s feature. Instead, it must be turned on from within a menu, but once on, it stays on until you turn it off. ISR can be used in either Auto or Advanced mode; Auto takes a single photo with automatically determined settings, while Advanced takes two shots — one with manual settings you can choose and another shot immediately following the first with automatic settings according to what the camera thinks is best.

I experienced surprising results with the Sony Cyber-shot DSC-W170 and Olympus FE-340 while testing their automatic smile-detecting functions. My friends thought I was joking when I told them the camera would take their picture only if they were smiling. When the flash went off multiple times as they kept smiling, they were intrigued by this feature.

Sony’s version, which it calls Smile Shutter Mode, is easy to switch into by turning a dial on the camera to a smiley face. Once this setting is chosen and the camera’s shutter button is pressed, the Cyber-shot will search for smiles in its subjects, and will take photos whenever it detects a smile. Settings within this mode can be set to specifically detect an adult’s smile or a child’s smile, and the degree of smile can be set to low, medium or high; I kept things simple by leaving the smile detector on default settings.

Capturing Smiles

Olympus calls this feature Smile Shot, capturing three rapid shots in a row to make sure everyone’s smiling. The idea of taking three shots would be extra helpful with an indecisive baby, but most of my friends were able to hold their smiles, which produced three almost exactly identical shots each time someone smiled. Smile Shot is harder to get to in a pinch compared with the Sony: it’s buried in a list of 13 settings on the Olympus when the camera is set in Scene mode.

The Olympus seemed to be a bit slower than the Sony when it came to detecting smiles, but both had trouble with bearded men and even some folks without beards. And people felt silly standing around with a smile on their faces waiting for the camera to finally work. Closed-mouth, no-teeth smiles were harder for these cameras to detect, but not impossible. In group situations, the Olympus camera will focus on whoever’s face appears largest, which could mean the person closest to the camera, while the Sony takes a picture whenever anyone in the group smiles.

Putting a Happy Face On

If someone isn’t smiling, Sony’s Happy Face Retouch tool can come in handy, but don’t count on liking the results. In a group shot of five friends, two people who weren’t smiling put a bit of a damper on the whole shot. I used Happy Face Retouch, but it picked up on only one of the nonsmiling faces, turning a confused look into a smile that looked passable. But other results weren’t usable. A serious-looking shot of me deliberately not smiling looked freakishly unnatural after the touch-up, mostly because the rest of my face didn’t join the smile. I looked more like someone who had received too many Botox treatments.

Sony says that, in group shots, it can detect and change up to eight faces, but in my tests it usually changed only one. This retouching tool is also difficult to find: It took me 16 button presses to change each image into a smile — or what Sony calls a smile. A few times, Happy Face Retouch couldn’t identify a face in the photo, even when just one person stood in the frame.

These digital cameras took good photos, overall, and are fun to use because they take pressure off the photographer. I found the automatic scene-detection tools of the Kodak and Sony to be the most realistic and useful offerings, and I’m sure it won’t be long before automatic scene detection becomes as commonplace as an automatic flash.

The chart below compares features of the three cameras described. Click on it to make it larger.

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It’s a good time to be in the market for such a camera. According to research from Olympus, unit sales for these gizmos has grown about 30% in the past two years, while dollar sales grew at about half that rate, indicating declining prices and improved technology. In fact, digital-camera prices have dropped an average of $30 over the past 12 months.

This guide offers an overview of the basics that you’ll need to know when buying a digital camera. It also explains many of the fancy features that are popping up on these devices, such as facial recognition — a camera’s ability to detect when faces are being captured in photos, thus appropriately adjusting exposure, focus and flash. This guide isn’t geared toward hobbyists, but rather toward average users who want good quality photos but don’t want to struggle with confusing product specs and promotions.

Point and Shoot, or Flaunt and Pocket

As you begin looking for a camera, selecting a preferred size and shape will help narrow your choices. Like iPods and cellphones, stylish pocket cameras are fashionable accessories; some come in shades like Precious Rose or Noble Blue. These pocket models, designed with emphasis on small size, are as easy to carry as they are to use for taking good photos: most offer seven or eight megapixels each, a 3x or better optical zoom lens and a stunning viewing screen. Good examples include Sony Corp.’s $400 Cyber-shot DSC-T100 or Nikon Inc.’s $300 Coolpix S50.

If you don’t mind sacrificing style for a camera that’s sturdier in your hand but bulkier in your purse, point-and-shoot models will be more your speed. On average, these cost less than their showy cousins. They’re more likely to have protruding zoom lenses that don’t collapse entirely into the camera body and often feature larger buttons. More point-and-shoots offer optical viewfinders, which have become practically extinct on pocket digicams where real estate is scarce. Examples of point-and-shoots with optical viewfinders include Eastman Kodak Co.’s EasyShare C653 and Canon Inc.’s PowerShot A460-both cost $130.

A third category of digital cameras, the single-lens reflex or SLR, continues to be marketed to regular consumers rather than to the photography enthusiasts for whom they were originally intended. SLR prices have dropped a couple of hundred dollars in the past year, but many models still start around $800 and come with detachable lenses and flashes. Average users can steer clear of SLR cameras.

Megapixels

Most cameras today offer anywhere between six and 10 megapixels; cameras with four megapixels or fewer are rather rare. But while higher megapixel counts are easy to find for less money, such as Hewlett-Packard Co.’s $300 PhotoSmart R967 with 10 megapixels, such intense resolution is really only necessary if you plan to heavily edit or blow up your photographs for jumbo prints, which most people won’t be doing.

Zoom Confusion

While most camera makers offer clearer marketing strategies now than a year or so ago, some still try to dupe consumers by listing only a camera’s total zoom — the optical and digital zoom multiplied together to create a larger, more impressive number. The truth lies in optical zoom, an enhancement made by a physically moving lens, not digital zoom, which instead magnifies a photo using the camera’s digital circuitry.

This year, companies also created a new category for cameras with 10x or 12x optical-zoom lenses — these are often referred to as high zoom digital cameras. In reality, a camera with about a 4x optical zoom is sufficient for most people.

Facial Recognition

This category is likely to become more popular. Facial recognition makes the camera smart enough to recognize that the subject contains a face and must be captured with the correct balance of color and lighting. Sony’s Cyber-shot G1 can detect up to eight faces in one image; Canon’s technology can detect up to nine per shot.

Image Stabilization

Image stabilization, or IS, was once only available in high-end SLR cameras. Now, almost all of the top-name consumer digicams offer this because without optical viewfinders, users must shakily hold cameras out to look through viewing screens. Referred to as antishake or vibration reduction by some manufacturers, there are three kinds of IS: optical and mechanical image stabilization, which physically steady a camera even when your hand is shaking, or digital image stabilization, which can improve a shot when the photographed subject is moving.

Some cameras, like the $250 Olympus Stylus 760, offer dual IS. This means the camera is equipped with both digital and mechanical or optical image stabilization, the best of both worlds. If you’ll be using a camera specifically for shots of moving objects, digital IS will work.

Storage — on Your Camera or on a Web Site

The cost of memory cards has dropped by half compared with last year: one-gigabyte memory cards now only cost about $30, and $50 two-gigabyte cards are even more popular thanks to people who want to record videos for uploading and sharing on Web sites. Data can be transferred from these cards by plugging them into a computer using an adapter or a card slot, or cameras can be connected to PCs with USB cords.

Now, Kodak, Nikon and Sony offer cameras with wireless Internet connection capabilities, or Wi-Fi. This allows you to take pictures and, when connected to a Wi-Fi hotspot, upload them directly to a Web site for sharing or storing, saving you the step of transferring the images to a computer first. These cameras are the $200 EasyShare One from Kodak, Nikon’s $350 Coolpix S50c and Sony’s $600 Cyber-shot DSC-G1.

Although using Wi-Fi in a digital camera is a smart idea, it could be a real drain on your camera’s battery. Wi-Fi is by no means a necessary feature, but some people will find it a useful add-on.

Battery Tips

Camera battery life can be affected by new features like extra-large screens — especially those that can play slide shows of your photographs — built-in Wi-Fi and even in-camera editing, which requires your camera and LCD screen to be on for longer periods. If you rarely take shots indoors, your flash will likely be used less, which might help your camera’s battery life. A spare battery is useful, and some cameras will work with drugstore batteries for the sake of convenience.

In-Camera Editing

The large, bright LCD viewing screens on cameras — some of which measure up to three inches or even three and a half inches diagonally — encourage everyday photogs to share their shots. To make even these images look better, camera manufacturers are incorporating in-camera editing for fixing mistakes on the spot, without a computer.

Cameras from all of the major manufacturers now enable red-eye fixes either as the photo is captured or after the fact. Companies such as Kodak offer zooming, cropping and panoramic shot stitching, while H-P cameras offer touch-ups like blemish-removing and ways to make a subject look slimmer.

* * *

The digital camera category is exciting right now, as these portable devices become more like computers thanks to in-camera editing, greater memory and built-in Wi-Fi. But remember that your photos come first, no matter how many bells and whistles are added to a camera.

Edited by Walter S. Mossberg

• Email: MossbergSolution@wsj.com