Unless you absolutely need photo quality, go with a laser. Lasers have sharper text and are generally faster than inkjets. While toner cartridges are more expensive than ink, they print more pages, so the cost per page is lower. But you pay more up front. Inkjets are better for photos. Personally, I use both. I have an inkjet for photos and a color laser for jobs which don't need absolute photo quality.
You can get a good color laser today for $80! Samsung CLP-300 at http://www.staples.com/office/supplies/p16__200401_Business_Supplies_10051_true_SEARCH
I have this printer and it's really nice. Toner cartridges are more expensive then inkjet cartridges ($70 for a set of 4 at http://ccs-digital.com/ink.asp
) but they last for about 2,000 pages.It does a nice job on photos, but an inkjet is still better for this.
Inkjet: As someone who was in the computer hardware business for years (though I rarely sold printers since I couldn't compete with the crazy rebates) I have always recommended Epson. The print quality is excellent, even on plain paper. I have photos I printed on a 640 about ten years ago hanging in my office which still look good, though not as good as the ones from the CX8400 on glossy paper. The warranty is excellent. For a year, Epson will express-ship a replacement and pick up the old one. I had one customer who needed this. He called one afternoon and had the replacement two days later. Another client bought a Canon. It needed two repairs within a few months. Each time it was taken to the repair center, then picked up a few days later. This client runs a specialty printing business and this really hurt. They have since bought an Epson CX5000 and have had no down time since.
The C120 (printer only - no scanner) is on sale at Ritz Camera free after rebate but you must also buy a digital camera. The cheapest is $15. With $7 shipping you pay $22 for printer and camera. It uses 3 colors and 2 of the SAME black cartridge.
A set of 5 cartridges are $23 at http://ccs-digital.com/ink.asp
The top Epson all-in-ones are the CX7400, 7450 or CX8400 which use 3 colors plus black, the same cartridges as above. You can find them for $50-$60. Circuit City has the CX8400 for $60 right now. They all have place to stick in digital media cards so you can print photos without a computer. The 8400 has a little screen so you can preview. I have this one and it's great.
The RX595 scanner/copier/printer also prints on DVDs. If you can find one of the discontinued versions like the R280/380, you can save some money. They use 5 colors plus black and have high photo quality. It was on sale at Ritz Camera for $45 after rebate with digital camera. They no longer seem to have the printer, though the rebate is good to the end of the month, so maybe they'll get more in. The printer is $130. The cheapest camera is $15 bringing the total to $145. Then there is $100 rebate and free shipping, bringing the final cost to $45. A set of 7 cartridges (1 extra black) is $30 at http://ccs-digital.com/ink.asp
You might want to call Ritz Camera and see if they're getting more in. I have also seen them on ebay for $50-$60 but you have to be careful. Some of them are without ink.
R280 $70 This is very similar to the RX595 and has many good reviews from actual users of the product. It uses the same cartridges as RX595. http://www.staples.com/office/supplies/StaplesProductDisplay?storeId=10001&jspStoreDir=Staples&AID=10422268&partNumber=709336&cm_mmc=CJ-_-affiliate-_-feed-_-listing&PID=500871&catalogId=10051&langId=-1
RX595 $99 with free shipping - expires today! http://www.newegg.com/Product/Product.aspx?Item=N82E16828103207&nm_mc=OTC-17exta6&cm_mmc=OTC-17exta6-_-Printer+-+Inkjet+printers-_-Epson+America-_-28103