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Nothing eases the entry into balloon or kite photography like a $50 camera. Winning an ebay auction for a Canon SD1100 for $50 got me started 18 months ago. As a beginner, I would not have been bold enough to fly a $150 camera on the days when my SD1100 captured lots of good aerial images. But just four months later, with some successful flying behind me, I decided that if I was going to invest all that time and effort getting a camera into the air, I wanted the photos to be more than minimal quality. Today, a Canon Powershot S95, which costs about $300 used on ebay, is my primary aerial camera.
The S95 (and other models) have slightly larger sensors and smarter processing than less expensive Powershots, and generally take crisper photos. But two other features can allow the S95 to take much better aerial images: manual focus and shutter priority. Most sub $200 point and shoot cameras have only automatic focus, and sometimes a swinging aerial camera just can’t find anything to focus on in time. Most sub $100 point and shoot cameras have only fully automatic exposure modes, and sometimes the shutter speed will be set too low for a swaying camera to capture a crisp image. Cameras that allow locking focus close to infinity and locking shutter speed at 1/640 or higher are generally going to return to earth with more usable photos than fully automatic cameras.
If flying a $200 to $300 camera is too rich for you, even $50 Powershots can have shutter priority by using CHDK. Manual focus is not a feature of CHDK (although it might be possible with scripts allowed by CHDK?). So you might have to settle for using the “Infinity focus” mode of most Powershots which I think is automatic focus which never tries to focus close to the camera. Using CHDK's shutter priority and the camera's “Infinity focus” mode can greatly improve the aerial photos from just about any Canon Powershot.
Canon has made 27 Powershots which have 8 to 12 megapixels and are under 250 grams (http://www.dpreview.com/products/search/cameras#criterias=SpecsCoreParams%2CBrand%2CSpecsEffectivePixels%2CSpecsWeight&includeDiscontinued=Yes&sort=newestFirst&view=list&page=1¶mSpecsCoreParamsBodyType=UltraCompact%2CCompact%2CSLRLike%2CLargeSensorCompact¶mBrand=canon¶mSpecsEffectivePixelsMin=8¶mSpecsEffectivePixelsMax=12¶mSpecsWeightMin=0¶mSpecsWeightMax=250). Of these I have had aerial success with the SD1100, A495, A590, and S95. Only eight the 27 models don’t need a proprietary battery pack (e.g., A495 and A590). You can learn which of the 27 will run CHDK here: http://chdk.wikia.com/wiki/Category:Cameras. If you use CHDK, continuous shooting mode becomes irrelevant because CHDK allows an intervalometer script which will trigger the shutter at any interval.