I've got an Olympus SP-550 UZ that's a great "tweener". It's compact, takes sharp photos with good color, has an 18x optical zoom and best of all to me, it shoots in RAW format (as well as JPEG)! I checked and Amazon had several used ones in the $200 range listed as excellent condition. You make could do even better with an auction. If you want a good zoom, these are great cameras. I also have a Canon XTi DSLR (and a few others
but I don't hesitate to use the Olympus when I don't need the bulkier Canon.
My brother has an SX5 IS, The predecessor of the Canon SX10 and it is a fantastic camera as well. They're a bit more expensive though.
Many of the smaller point and shoot cameras take great pictures but you're going to be hard pressed to find a pocket camera with more than a 3X zoom. If that's enough, you should be able to find a decent new camera in your price range.