Don't expect great magazine quality photos from a $500-800 camera setup.
As far as price, I have to stay below $1500. Under $1000 would be better.
IMHO, at that price range, u/w photography has not really made much advancement in the last 5 years. I have been waiting/hoping for a new hot s**t p&s for u/w and I don't see any indication the manufacturers care to fill that void. If you want the good stuff they want you to pay more!
My favorite two p&s's for u/w are both discontinued; Oly 5050 and Canon S-70. They both have raw capabilities, work well in full auto and can be used with manual settings. The manufacturer housings (PT-015 & WP-DC40) do the job and work with many strobe systems (although no ttl). Wet mount wide and close-up lenses are available.
The 5050 is the cult camera of this catagory, with arguably the best p&s lens ever for u/w. Since the release of the 5060, no p&s lens has been as bright as the 5050 (& 4040). Both 5050 and 4040 are still used by photographers who take
magazine quality photos. We are now seeing p&s cameras with twice the pixel resolution, but the relatively cheap lenses restrict the incoming data (light) resulting in pictures that are only occasionally better.
The S-70/WP-DC40 is smaller, which is nice (fits in BC pocket) and has a nice custom setting for ambient u/w that works really well in shallow clear water. This is more of a true p&s, with manual functions not so easy to use as on the Oly, but it is a very easy to take nice pictures, and has a slightly wider stock lense.
Ebay is where these cameras, housings and more are still to be found; 5050's, 5060's, 7070's, 8080's, S-70's and S-80's, although the last one does not do raw. Yesterday this
5050/PT-015 sold for $362.77 + shipping (my max bid was $361.77). Last week I won this
Inon wide angle lense and dome for $476.01 + shipping (max $476.77). In the past couple months there was a 5050/PT-015 bought for less than $350 and a seller sold both Inon pieces seperately for less than $450.
I also recently won an auction for a
Fuji e-900/Ike housing/Inon WAL, although my bid was under the sellers reserve price. We communicated post auction and he would have sold it for less than $700, but I was not impressed with the low light focus reviews of that camera.
There are also strobe systems and individual pieces on ebay. I do not have any recent
medium price set ups suitable for this discussion to show, but I did score this over-the-top
dual Ikelite DS 200/Ultralite tray & arms rig for $776.77 + shipping.
Finally, last year I got this full set-up off ebay (shown above w/o WAL and camera); 5050 (512 card), PT-015, Sea&Sea tray (Jeton arms?), Epoque WAL and dual ES-150 DS strobes, for only $800 shipped! These are not deals that are found every day on ebay, but they do happen; luck and patience are required at the very least. This was way more than I intended to say but said it I have, YMMV.
edit: not sure the ebay links will work for everyone, oh well.