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Between the two we tried (kodak and olympus) the olympus made a far better underwater camera.
However, the very best underwater pictures are taken by an SLR with a special housing and mounted to a frame. So you'd use a Nikon SLR, buy a housing kit, and an underwater mounting kit for the special flash / light you'll need to get the very best pictures.
I think that there are some disposable cameras that work well - I've seen some great shots that came from disposables. They are basically single use self-enclosed units. Any worthwhile camera shop near a beach should sell them.
Any camera that has a special underwater housing will work fine. The housings keep water from the camera, and prevent damage due to moisture and salt. They can be really expensive, though.
Is there any small camera that doesn't require housing. Something small and easy to carry while in the water?