I’d used Olympus film SLR cameras in the past, and the C5050z seemed ideal for underwater work – and there was a housing available.
The main features which seemed relevant were :

• “My Mode” – which meant that I could preconfigure presets, and get to them quickly
• RAW format files – meant that the white balance (and exposure!) could be adjusted after the dive
• TTL flash (although I didn’t realise at the time how useful this was)
• Fast lens – needs less light to register an image

I got a Sea and Sea YS-25 strobe. It flooded on my second trip. I got a replacement, which flooded as well.
Sea and Sea reckon that this was due to user error. As I’m clearly too stupid to use their products, I’m not buying any more.
I bought an Inon D2000 (in tiem for the first Red Sea trip), which doesn’t seem to have suffered from my idiocy, and which has given reliable results. I’ll probably stick with them …

I bought some extras lenses through 2005 – Epoque macro and wide-angle.

I supplemented this with a (less powerful) Inon 165 macro in 2006, when I also bought a Fuji E900 and Ikelite housing.
At the time of writing, I’m waiting for all of the bits to hook up the strobe (Ikelite uses a different screw fitting to just about everyone else).