Don't waste your money - even if the scam bit Don pointed out wasn't true these cameras are not nearly as good as they appear.
Interpolation is just a way of mathmatically enlarging the image. Overall this actually decreases image quality as it introduces artifacts that wouldn't be there if you just use the cameras raw resolution. So even if it interpolates to 12MP, the picture is no better (and probably worse) then what comes off of the chip (probably 3-4MP).
As for the optics, they're not great. The camera does actually have a 3x optical zoom. The digital zoom (which a lot of major manufaturers also have) is a gimmic - just more interpolation. I'd just turn this feature off - you can get the same effect (or better) by cropping the image on your computer, and resizing it for printing then.
You're better off saving your money and going for a name-brand camera (canon, nikon, and olympus being the ones I would recommed). Although they cost more you'll be much more staisified with the resulting pictures. Few other things:
1) Larger diameter lens = more light-gathering power = better in low-light conditions. So if you're planning on using this for diving photo's you'll probably want to look for a camera with a larger lens.
2) Optical zoom is the only useful form of zoom. And more is always better. But don't forget about wide-angle; its just as important to have a good wide-angle (more important if you take a lot of scenery pics) as is zoom.
3) Power consumption can be a major issue - particularily on trips where access to power may be limited. Look for cameras which have power-saving options (like being able to turn off the LCD screen). Likewise, cameras which work off of 'AA' batteries are also good for the traveler - these batteries are available everywhere, you can use the new rechargables (nickel metal hydride) - which last forever, and they (normal AA's and NiMH rechargables) are much cheaper then buying additional camera-specific lithium batteries.
4) Any time you buy a camera there's going to be trade-offs. Smaller, pocket-sized cameras are great for traveling - they're small, fit almost anywhere, and are "descrete" should you want to take photo's where its not allowed. But they tend to have lower zoom, smaller lenses (poorer low-light preformance), and weak flashes. Larger cameras tend to not have these issues, but are less convenient for travel, tend to use more power, are (generally) more expensive, and tend to attract thiefs.
5) The resolution (megapixels) of a camera are not the only feature you need to worry about. In fact, its a minor consideration. The quality of the optics, the quality of the CCD, the power of the zoom, how wide the "wide-angle" is, the build quality of the camera are all far more important then the megapixels.
To put this into perspective, I have both a canon G3 (4 megapixel, large lens, 4x zoom) and an olympus somehting-or-other (6 megapixel). Although the size of the image is larger coming out of the olympus, the G3 still kicks it's ***** in terms of photo quality - better low-light performance, crisper images with cleaner edges, much wider field of view in the wide-angle end of zoom, more zoom, etc. So even though the olympus has bigger megapixels I still turn to the canon when I need quality photo's. The olympus is great if I need something small.
One last comment on megapixels. About the only thing this determines, with any degree of certanty, is how large you can print an image until it appears pixelated (boxy). As a general rule you want 200dots/inch for a quality print, although you can drop that to ~150dpi if you need. This means that with a 4MP camera you can print upto 12" wide (200dpi) or 15" wide (150dpi). At 8MP this doubles, etc, etc, etc. Do you really plan on printing up stuff that size? Not to mention that the optics tend to be the limiting factor - even in 3-4MP cameras.
For some real good reviews, plus the ability to do side-by-side comparisons, check out:
www.dpreview.com
No association. Just a very happy customer who's used it every time I've bought a camera - and they've never done me wrong.
Bryan