TheDailyNathan recommends Fujifilm FinePix F40fd as Best Point and Shoot Digital Camera for Low Light Photos Under $200.

Photography is the conversion of light into images (from the greek roots phos (photo-, light) and graphê (-graphy, drawing), “drawing of light”. Photography thrives on light, so when we have lots of it available - bright outdoors in the middle of the day, for example - cameras have no problems producing great pictures. Light levels drop when you’re indoors or outside at night, however, and with less light available, photography becomes a much more difficult process: the camera has to use a long shutter speed to capture enough light, causing blurry pictures because the camera is shaking or your subject is moving; or the camera has to use a higher ISO sensitivity, causing noisy/grainy pictures.

There are three features available to help take pictures in low-light situations.

• Image Stabilization: Image Stabilization (IS) is a term that describes a host of technologies that stabilize a camera element (the lens or the image sensor) to compensate for camera shake (when you don’t hold the camera steady) and reduce blur. Image stabilization can be extremely effective for low-light situations, but will only work for static subjects. IS isn’t capable of stopping your subjects from moving, so if you’re taking pictures of people or animals or anything that moves, you still might get motion blur.
• Low-noise, High ISO: An alternative to using a long shutter to capture enough light is to simply use a high ISO to boost the image brightness - this is akin to turning the volume knob on your stereo to play music louder. By doing this, you can use a faster shutter speed, avoiding the camera shake and motion blur problems typically experienced in low-light. The downside of using high ISO is that images become noisier, with color splotches or random “grain” (this is much like turning up the volume to get a louder volume, but generating louder static at the same time). How bad the noise will be will depend on the camera and individual tolerance, but some cameras, large-sensor SLRs in particular, have extremely low noise at high ISOs, making them ideal low-light cameras.
• Large aperture: A lens aperture is the size of the lens opening - it essentially defines how much light passes through and reaches the camera’s sensor. A larger aperture lets in more light, and as a result a higher shutter speed can be used to eliminate the problems of camera shake and motion blur. Aperture is usually denoted by f-numbers: f/2.8 would be a relatively large aperture, while f/5.6 would be a relatively small one. For most compact cameras, the aperture is virtually the same f2.8-f5.6 for almost all cameras (this denotes the maximum aperture from the wide zoom end to the telephoto zoom end). Larger aperture lenses can be found for digital SLR bodies, although most large aperture lenses don’t fit into the budget considerations for a $750 camera.
• Flash: For the most part, flash is not a feature of a good low-light camera. While flash is often used to illuminate dark scenes, it often creates harsh, flat lighting and shadows, and isn’t effective beyond a close distance, making it useless for photographing things like buildings or landscapes or anything beyond a few feet. However, some cameras are better than others in this regard - cameras with “pop-up” flashes fire the flash from a less direct position, reducing some of the harshness and shadows that appear when a built-in camera flash is used.

For easy point-and-shoot use, the best low light camera will offer a combination of both image stabilization and good low-noise, high ISO ability. Flash can be a useful tool as well, although it can’t be fully effective without utilizing more advanced techniques.