I don't think anyone really clearly defined the megapixel concept. Digital photos are a set of pixels, just like a computer monitor. A full screen at 1024x768 would be 786,432 pixels or approximately 0.75 megapixel. To provide a quality picture for full screen, you would want more like a 2 megapixel camera to allow for cropping and oversampling. An 8 x 10 inch print on a 300 dpi printer is 2400 x 3000 or 7,200,000 pixels or almost 7 megapixels. In the real world, it takes about 3 to 4 megapixel camera for good 8 x 10 inch prints (because you can't really see 300 dpi).
When buying a camera, after you get up to 3 megapixel or so, it becomes more important to have a good lens and good exposure control. Also, look for a camera using Compact Flash (CF) memory because it's cheaper and using AA batteries because rechargeable NiMH AA's are relatively cheap.