I have both a SLR and Digital, both Canon Rebels.
My digital is 6.3 megapixel and takes fantastic shots but is out of your price range. I bought that particular digital because it is one of the few that you can buy different lenses for, uses flash cards for storage, has a rechargeable battery that allows for over 400 pics, and does not make short movies.
Most photograph quality printers qulaity is around 5 megapixels so anything higher right now is a waste unless you buy the professional stuff.
As far as 1600X1200 that is what a 3.2 megapixel camera would produce. If you can afford higher by all means do so. Mine currently produces 3072X2048 pics.
Which ever brand you chose make sure it has the following features.
Rechargeable battery.
Quite a few use standard "AA" batteries but they last for maybe 15 shots and you have to replace them. Rechageable "AA" batteries last longer, approx 30 - 50 pics, but can take quite a while to recharge.
Removable storage device.
It doesnt matter what type you get. Compact flash cards, Smart Sticks, or any other type work quite well. The size of the card and the resolution of the pics determine how may pics you can store on a card. I have 1gb cards and can store 300 pics at my highest resoultion.
Card Reader.
If your computer or printer has a multi-function card reader you are good to go. IF not you need to buy a good card reader so you can easily transfer your pics to your computer. They brand of card reader you should get is determined by the brands of cards you buy. Lexmark cards are "slow speed" cards and work fine in all readers. San Disk and Sony cards are "high speed" cards and you should get a San Disk reader to read them. If you try to use a Lexmark reader with these cards you are guaranteed to have problems.
I know this is a lot and you have to decide based on these replies. I hope your experience starting out is a pleasurable one and welcome to the world of digital photography