A digital camera is sooo worth the investment! Especially the ones that are coming out now with such high resolutions. 4.1 megapixel is plenty of capacity unless you plan to print some really large prints. But for the computer & internet, that's great - and a great price. You'll have some lovely photos.
One thing I would suggest is making sure you get a camera that has a very small "lag time" between the time you press the button and the time the camera actually snaps the photo. In regular 35mm SLR cameras that time is instantaneous. Not always so with digitals, so check that out. Especially if you want to take action shots of the kitties. They move so fast that just when you have the perfect shot, you press the button and in a second they have moved and there goes the prize winning photo! I've had Nikkon Cool Pix 950 and 990 and they had a relativly long lag time and it was disappointing sometimes. Luckily I wasn't paying for film, but sometimes that perfect moment never comes around again.
Just a thought.