I don't know much myself, I've only used one little digital camera for less than a year, but I read and researched a bit. I still use my 30 year old 35mm, but cost-wise I'm having a blast with digital (no film cost = I'll try 'risky' and 'optional' pictures that I wouldn't waste film on, and doing quite well at it). This is a quick summary of my experience.

Camera 'size' and it's cost go hand-in-hand usually. If you can wait and get lucky, price of older discontinued models and store demos drops 2/3 or more. New models often have more options than the old ones, but old ones still take pictures. Here is my guide to how much camera is enough:

2 megapixels makes 1600 X 1200 pixel pictures on a computer, twice as big as you need for e-mail and web sites these days. But I consider this to be a minimum size, because I can make them look sharper if I reduce them to fit the web page. I also like to crop off excessive sky and grass to make files that load faster on the web page. If you print them at a photo store, like Walgreens or Walmart, you should get a really good 4X6".

Book and magazine publishers may not be interested in using this small a file.

These 2 mp cameras are often 'point and shoot' variety. Prices $150 to 199. I have a lot of fun with mine, while I wait for it to break (I'm not easy on cameras) or prices to drop on the better models.

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3 and 4 mp cameras are a step above. Some publishers might like your work, though they prefer 6 mp for full-page magazine printing. At 3 mp, you should be able to get a good enough 8X10 photo lab print. Overkill for web sites and e-mails, but often you don't know the final use of a picture until afterwards, and if you don't have a big enough file size, you can't make it better later. You can always reduce a good picture for the small jobs.

These 3 to 4 mp cost 250 to $500. For that $, you should be able to choose what files the camera makes. There's a 'raw' or native file that is really large but of Highest quality, something that might come in handy if you decide later that it was a really good picture and want to publish or print it big.
And there is usually a jpg file, compact and convenient.

Over 4 mp and you're professional or rich, and don't need to read this page.

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Next to consider is the lens. For train watching and general work, get at least a 3 X optical lens (equal to about 35 to 105mm zoom on a 35mm camera). Lots of these are in the $199 point-and-shoot cameras.
Advertising brags about the digital zoom capabilities which extend beyond the optical, but quality suffers. I do use it occasionally. But go for all the optical zoom you can afford.
About 6X optical models cost 250 to $399.
10 X about $300 to 500.

And if you take pictures of model trains or flower blossums and even moths, most all lens do very good at close-ups of little things. Even the cheap cameras.

The bad side of optical zoom is risk of mechanical failure. But it's worth it.

And Zoom and file size don't mean a thing if you shake the camera and blurr the picture. Digital cameras are so light compared to film cameras, and therefore easy to shake in my hands. When going 3 X and beyond, try to use a tripod or monopod or sign post or something to hold it steady. This helps any camera, but can slow you down.

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Buy the biggest memory chip you can afford. I like at least 64 Mb. When I'm away from the computer (equivalent to reloading film), I don't have to change to a new card until 130 pictures. Often I take 70 pictures of stuff in one afternoon. You only see a handful of it on my web pages after I edit it. I might take only one or two pictures with the 35mm in the same afternoon. Film costs about 55 cents a shot. Can't afford more. But I will take digital of the most insignificant things. And make use of my time and the gas in the auto.

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Take lots of pictures
Digital is convenient compared to 35mm film because you can see your results almost immediately. But sometimes I get home and look at them on the computer monitor and say 'oops', that one had an auto whizzing past, or I shook the camera, or something. Take extras and sort later. It's cheap (until you want to store all those pictures on your old under-size computer....)

Learn the features of your photo program. One usually comes with a camera. I like crop, re-size and sharpen.

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General 'problems' with digital
Problems I describe here usually diminish as the camera price goes up. Some of these things I describe here aren't much different than the care you'ld take with a film camera.

Prefer cameras that use 4 AA batteries . Not 2, they don't last long. Use rechargeable batteries meant for electronic stuff, or similar. An Alkaline battery lasts only 1/4 as long as the best ones. You can use alkaline batteries in a camera until the camera says put in new batteries, and those old batteries will still have plenty of power left in them to run radios and toys.
Some cameras use their own special batteries. Beware cost of replacements ($40 sometimes) when they get tired of re-charges after a year.

Digital cameras take time to turn on. Maybe a few seconds. If you are in the area you want to take pictures, especially if action is impending, turn it on, and leave the LCD off (saves battery power).
Most cameras have a two-stage button, push it part way and it gets ready and usually flashes a light telling you so, then push the rest of the way and it takes the picture instantly then. If you get excited and push in all at once, the camera might still take its merry little time getting ready before taking the picture, and maybe that special fast-moving train has rolled past its prime spot for your picture. Sunshine helps the camera work faster. Money can too.

If the sun is at your back and the weather is perfect (the fabled Kodachrome days), just shoot the picture and be about your business.

When the weather and lighting is less than ideal, take advantage of the half-push pre-set. Ahead of time, point the camera at the scene, zoom in to please, then aim the camera toward the darkest part you see or at least get rid of the bright sky, and half-push the button to pre-set this. (gray, green, or brown grass makes a great 'gray card' to set a camera meter. But avoid white snow with this method)
But don't swing too low or the auto focus will set for some ridiculus close distance. Now swing up and frame the picture. Finish pushing the button to take the scene. Again, more expensive cameras aren't as fussy. I do this pre-metering method even on my 35 mm.
And avoid metering the bright headlights, the rest of the picture may turn out dark in comparison.
All of the above method is just a cheap trick to make a cheap camera take a decent picture. There are similar tricks for film cameras, too.

And to top it all off and make it more difficult, on rainy dark days I set the camera to add 1/3 or more stops to lighten the scene. Which slows down the 'shutter speed' even more, risking a blurr. But I get a great picture. I've done this with the 35mm too. Film loves sunshine, and not much else. I like my dark-day digital results much more than film results.

And digital takes time to store the file before it will let you take another picture . Again, expensive cameras over $300 usually let you shoot a half dozen before it says 'wait for me to catch up'. I can usually get one good picture of a train approaching and leaving a road crossing if they are under 30 mph with my $164 cheapy, about three seconds between pictures that sometimes seems to take an eternity.
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Digital cameras don't like moisture
Keep water from getting inside. I've used mine in light misty rain, so long as drops don't sneak in around the lens or any other obvious big gaps in the camera body.

Avoid condensation. This same rule applies for film cameras. If you use the camera outdoors on a cold wet day, warm it up in a dry hot auto before you take it into a humidified house. Or zip it up in a tight plastic bag, then take it in and don't open the bag for two hours. The electronic sensor chip doesn't like moisture. And dirt. When you turn on your camera and the lens moves outward, point it down so gravity will help drop out dirt that could get into the camera.

Digital sensors love cool temperatures (but batteries and LCD displays don't).
The electronic sensor surface likes to be cold, it will take sharper pictures, or have less electronic 'noise'. But not so cold as to get condensation. Again, expensive cameras are good enough to be less bothered, but cool helps them too. I (and professional camera magazine authors) can see the difference in pictures, comparing 45 degree F days with 95 degree days.
In the hot summertime, professionals suggest keeping the camera in an air conditioned car until you want to take that perfect picture (and I like to be in that car, too.)
Hot hazy weather conditions will probably affect your results more than sensor temperature.