Many have made some good points.
Mainly, you need a camera with full manual controls. It is pretty important to always shoot in RAW mode (many reasons), so obviously you'll need a camera that does that.
Forget the internal flash idea - totally bad idea. If you want to shoot macro, you'll need to point the "cone" of the flashes inward (almost back toward the lens). Two flashes are better than one.
Forget shooting "distance" shots with a flash. Not happening without backscatter. Most of your stuff will be less than 5 feet in total distance. I use twin Ikelite DS160's, and they're both beasts (great for clearwater cave shots).
On the camera, if you're stuck with a fixed mount P&S, get one with good glass. No amount of flash is going to make up for a cheap lens. I still have a G-9 in Ikelite housing with twin DS51's on it (might be for sale...
) that I let my photo students shoot with, and it takes geat pix.
If you want to get into macro, there are "wet" lenses you can use (goes over the housing port, and is installed in the water), that aren't horrendously expensive, that can be added later.
Since you are budget restricted, and can't get an SLR, stick with the higher end point and shoots by Nikon and Canon (Canon has a better sensor setup, IMHO). You can either get full control function housings (meaning you can adjust/change everything underwater), or the simple mafr's housings (not as good, but budget conscious).
You can pick up decent used equipment. On the housings, make sure you get one you can get parts for (you'll probably be looking at Ikelite for this), and that can be serviced (the push buttons do need rebuilding, just like your regulator).
Check the boards here for used gear. Well cared for gear brings about 60-70% of new, depending on age, and service condition. On cameras, the P&S aren't as big an issue, as their shutter setup is completely different that an SLR. The better known brands have a ready supply of parts, and can be serviced by many third party vendors.
What I tell my students is to buy more camera that they think they'll need. Many people think they'll shoot video, but the reality is video is much more difficult to share "off the shelf" (a photo book). I shoot a couple of higher end Canons, that do motion picture quality video - but the reality is I shoot very little video, and mostly stills (and I have a separate video setup that I spent over $6k on, that I haven't used in 3 years).
Buying an "older" camera setup will save you big bucks. Like computers, manufacturer's come out with new models every couple of years, or so, touting a better processor, less "noise", etc. But unless you're blowing stuff up over 11x14, you can get exceptional detail with a 12MP camera. The quest for "more megapixels" does not make up for poor shooting techniques, or lack of knowledge about aperture, speed, DOF, etc.
Sounds like you're on the right track, and asking lots of good questions. But be prepared to spend almost as much on your flashes (and sync-cords) as you did on the camera/housing. Photography is all about the light. You can have the most perfectly framed shot, but with poor lighting, you can't fix it too well with Photoshop. A good twin flash setup, and arms, will set you back another $1200-$1500.00.
Happy hunting!
