well, depends on what you are satisfied with from a picture quality standpoint. if you are OK with "documenting" the experience and not wanting "nat geo" level photo's, then i'd put you in the sub-500 range. im not a big fan of the "compact waterproof" cameras, as failure is always inevitable.
i opted for a micro 4/3" camera with changeable lenses with an underwater housing. i picked up a good deal on an olympus EPL-1 with housing for $399. it doubles as my everyday use camera as well. this would be fine snorkeling.
i take a ton of photos scuba diving, so i have a set of strobes, camera tray and arms to round out the package....but this is another conversation.
option 2 would be a go pro setup. you could take camera stills from it, and its reasonably priced.
im not sure if you could find the oly deal (a few months old), but some food for thought on the best way to spend your money.
Chuck
