I like the Snap Sights series. there is on that is rated to 90 feet and has an onboard flash that can be turned on and off. You can also change the film (use 400ish) and the batteries in the flash.
Get close. Use arm's length as a guide. These cameras have a fixed focus distance and anything inside about 3 feet will be blurry. The flash, on new batteries, seems to cover about 4-5 feet pretty well. If your object is farther than that away, turn your flash off to avoid backscatter. Be prepared for these images to come out pretty blue (assuming you are diving in blue water). Getting close and making sure your flash falls on the subject is the only way to get colour.
For digital options, have a quick look around the board as there are several current discussions on models like the Canon A series and Oly 350...