Scubapat,
Before you make a decision consider the following questions:
Will you be diving locally or will your dive trips involve air travel?
How often will you dive?
Do you want some "nice' UW photos or do you plan on publishing/enlarging the photos?
Is simplicity important? (too much task loading is not good)
Are you a diver who likes to take photos or an UW photographer?
Gilligan's reply is a good one depending upon your priorities. I have an Oly5050 with the UW housing and while it takes good photos, I never dive here at home. All my dive trips are plane flights away. I found the learning curve for the 5050 to be a pain in the butt for occasion UW usage (2-3x per year). I always admired my wife's Canon S400. It was easy to pack, lightweight , easy to use and took decent photos. I personally am not a fan of rechargeable AA batteries. I have a slew of them and before every dive trip, I do a slow charge (overnight) and almost always end up with 1 or 2 dead cells out of 4. It's a pain in the butt to keep replacing rechargeable AA's. OTOH, even though the proprietary Canon batteries cost more, I love the convenience of one battery, a small recharger and a quick recharge time. I never had a Canon battery fail yet, I can't say the same for the high end rechargeable NiMH AA cells...
Based on my answers to the above questions, I decided to get a Canon SD700IS. The screen size is great, I can read the large simple display, it is much easier to select modes than the Oly, there is far less shutter lag (almost none), longer battery life, easier to travel with and it takes good enough photos for my purposes. Oh and the biggest advantage, it is compact and easy to pack it, the housing and the accessories all in a small carry on bag. If I lived in a place where I dive/take photos 3-4 times a week and could get in a car and drive to the dive locations, I would have a different opinion.
