best for under $500

what is a good point and click camera for under 500 with a good lense, thank you

What will you be using the camera for? Will you be hiking with it? Wil it be near water? What are you looking to photograph? There are a lot of cameras out there and some do some things better than others.

I want to use it for taking pics of us wakeboarding but will also use it for other things like taking pics of my son playing baseball, etc. I will want to get a waterproof housing so I can take it out on a tube with me

Olympus offers a point and shoot for roughly $300 that is waterproof to 30 feet. It's a killer little camera, also the insides are gel mounted so it is also freeze and drop proof. And it's all under warranty! We had someone drop an i-beam on the thing and crushed it and olympus still replaced it! Not a whole lot of zoom though, I believe it is 3x optical zoom. The one I am thinking of is the 770 SW, I know they have two newer generations of this camera and supposedly it just keeps getting better. Pentax also offers a water proof point and shoot but I've heard of some people having some problems with it, that one is the Optio... shoot I don't remember. I would strongly recommend visiting your local camera shop, they're bound to know a bunch and will steer you in the right direction. Also if you ever have any problems with the camera they'll be there to help you out. A good relationship with your local photo store is always a good idea. Also, Canon offers water housings for most of their point and shoots, or at least they used to. Just some food for thought.

I think I will do that because now I am wondering if I am better off with a camera like the Nikon 20D

canon g9.

You must mean Canon 20D
Nikon had the "D" in front of their number plus their numbers are not that low.
Canon has the "D" behind the number.

Long time ago, Canon did have the D before their camera model. Canon D60 - one of the first DSLR. But you are correct that is the distinction now. The Canon 20D is an old camera. Still good, but old technology.

Canon G9 is a great camera.

well I went ahead and brought the Nikon D40 with the 55-200 lens.

Look into the Canon S3 IS and S5 IS. Both are incredible cameras for well under $500. I would actually go with the S3, since the S5 is pretty much the exact same camera with a little bigger LCD and a few more megapixels (but the S3 has a screen that swivels and turns, which I love).