To stay within your budget, I would recommend you go with the Sandisk 256MB mp3 player and a Canon A400 digital camera. Go with the A300, if you need even more space under your budget. It has not optical zoom, so it's less desireable.
The biggest thing is that the zoom is so small on the SD110. Also, I like that the A series takes AA batteries. Much cheaper to replace them with rechargeables.