I have 2 Canon cameras, one is a powershot with 12x zoom and I love it but it is too big to fit into my pocket. So I almost always carry a Canon Ixus, that is the model name. I have 8.1 megapixels with a 3 or 4x zoom, I forget which. The higher the megapixel the larger the photo you can print from it so unless you plan on going wallsize with your prints it is not overly relevant. And I have found that the higher the megapixel the more important it is to be able to hold the camera steady.
I would suggest you look at Ixus models.
The SD card is the memory card, it is slightly larger than a postage stamp and usually fits into the camera beside the battery. It holds the files of the pics you take. Usually when you buy the camera it comes with a card of maybe 512 m but today you can buy a card of 1 or 2 or more gigs for a couple of dollars and with the larger card you will probably fill your card in one outing.
Most all cameras come with an auto mode and that is what I use unless it is a specific shot that the camera may also allow for such as “twilight shot” “fireworks” “beach” and so on.
iPhoto is good but most cameras come with a photo editing program included and that is something to play with as you progress and come to enjoy the tweaking of photos.
Hope that helps.