Watch out for recommendations from the younger digital folks. They are very well-intentioned and know what they are doing for people like themselves who grew up with digital stuff. They think they what to get for the older crowd, but most of them live in a fantasy world anyway.
There are two items that are a must-have for old folks like me (67). And yes, I am a crotchety, crusty old guy, but I am very reasonable when it comes to pleasing folks like myself. Here's what you need:
1) An image stabilizer, because our hands start to shake a lot more as we get older, although we don't like to admit it.
2) A viewfinder, because all of the cameras we learned on had viewfinders, and we don't like to learn new stuff.
If you don't have BOTH of these features, your Christmas present is likely to frustrate your in-laws, get returned, and further convince them that this new digital stuff is full of baloney..
As to the kind of camera, you'll get all kinds of advice from well-meaning people on CNET and folks at the camera store. Guess what?? They will all be wrong!
Just pick out the seemingly easiest camera that has the two features above. Then give it as a present. Before they try it, be sure to tell them that you want to take them to the camera store (don't order on the net.) and let them try a bunch. Maybe they'll choose the one you did, but then they will have chosen it, and your off the hook.
Also, don't let them see the price tag. If they see the cost, they will want to buy the cheapest one.
Maybe your in-laws aren't as crotchety and crusty as I am, but ignore my advice at your own peril young 'un.
Now, if I could only get my own kids to listen to me .......