Basics

A digital camera is really not that diferent from a film camera. On a film camera, light is focused by a lens onto a rectangular piece of film. Because different areas of the film are exposed to different colors and brightnesses, different areas undergo different chemical reactions, and so an image is recorded. Once the lens is focused, and the shutter is opened a certain width through a certain amount of time, the shutter is then closed again and the film is moved out of the way to be replaced by a fresh unused one. How much the shutter is open and for how long, along with how much light is outside and how sensitive the film is to it, determines how dark or bright the picture will be.

On a digital camera, light is focused by a lens onto a rectangular CCD sensor. Because different areas of the sensor are exposed to different colors and brightnesses, different areas undergo different ionization processes, and so an image is recorded. Once the lens is focused, and the shutter is opened a certain width through a certain amount of time, the electrical charges induced in the different areas of the sensor by the focused light are "flushed" to a processor that converts them into an image file and then saves that file on a memory card, or in the camera's small internal memory. How much the shutter is open and for how long, along with how much light is outside and how sensitive the sensor is to it, determines how dark or bright the image will be - but you can see how bright the image will be before you take it by looking at the electronic screen on the back of the camera, which is connected to the CCD sensor to show you the "predicted" image in real time. You can also have this screen show you an image file after the picture is taken, so you can see how it looks. And since the CCD can capture images at a high framerate continuosly, most digital cameras can record this data as video, usually along with sound recorded by a small microphone in the camera.

The sensor is smaller than a frame of film, though, so the lens can be scaled down proportionally. Or, if the lens is the same size, it will be gathering more light per area of sensor, so this more intense focusing can allow for the shutter to be open less (which leads to less blur).

How sharp will your image be? That basically depends on two factors: How sharp your lens is (how sharp an image it can project on the sensor), and how harp your sensor is (how much detail it can record if a sharp image is projected onto it). The sensor is made of millions of small photo-sensitive cell clusters, each of which can record the color and brightness of the light falling on it. The more of those clusters you have, the more details you could capture. But, if the clusters are too small and too crammed together, then they start interfering with each other and being thrown off by small signals of light or electricity, which makes the picture look "grainy". So the sharpness of your lens, the number of cell clusters in your sensor, and the grainy-ness of your sensor, are all crucial in determining how sharp the picture is that comes out at the end.

How sharp the lens is has a lot to do with how carefully it is crafted - out of what materials, if any of the elements have aspherical shapes, et cetera. In general, a bigger lens will be much more likely to project an image sharply. So whether a camera's lens is the size of a dime, the size of a quarter, or the size of a small cup, will give you a pretty good idea of how good this lens is at gathering and focusing light. Lenses made by Leica, Carl Zeiss, and other names associated with photography (like Canon, Nikon, Olympus, Fuji, and Kodak) are usually the sharpest. Panasonic cameras have Leica lenses, and some Sonys use Carl Zeiss glass.

The number of cell clusters in the CCD sensor (the "resolution") is measured in megapixels, so that's a dead-easy one. It usually says on the box.

The grainyness of the sensor, although it is as important as the resolution to determining how much detail is captured, is in part dependent on the size of the sensor, and on the resolution of the camera. Smaller sensors, or sensors with more megapixels - in other words, sensors with more pixels per unit area - tend to be grainier. So small cameras, and cameras with 6-8 megapixels, tend to be real grainy. This becomes painfully evident when you make the sensor more sensitive to light (high ISO speed, like 400) for shooting in low light.

(This is the main reason why pictures made by those huge expensive SLR cameras are a lot sharper - their sensors can have as much as 16 times the area of most digital camera sensors, so grain is not a problem at all, even at high ISOs. That, and lenses are typically a whole lot sharper. So an SLR with 6, 4, or even 3 megapixels can take pictures as sharp as those taken by compact digital cameras with twice the number of megapixels).