I need to buy a digital camera that uses a telephoto lens. Any suggestions?

It is a gift for my in-laws, so I want it to be a good piece of equipment that takes great photos, that doesn't necessarily break the bank. Please advise. Thank you in advance!

edit: yes, one with a big zoom, adjustable lens.
right now, their camera still uses film and they were talking about upgrading to a digital camera, but they wanted one with a telephoto lens because they think it takes a better picture...

A Pentax K100D. This camera is AWESOME and CHEAP (well, cheap for a DSLR) and is always overlooked under the shadow of Nikon and Cannon. Pentax has a great rep, great warranty, the features of this camera are SUPER EASY to use and it gives you the option to turn it into a point and shoot camera. The best part is that this camera can use ANY lens by pentax (including 30 year old lenses) so you can get some old but good ones off of ebay - including your wide angel lens. I have this camera and the only one I would want over this is the Pentax K110D b/c it has more megapixels but is MUCH more expensive. Good Luck!!!

adjustable lens or interchangeable lens like DSLR? or cameras that just zoom

It depends on how much zoom you want and how much you're willing to spend. Some suggestions:

1) The 7.2 megapixel Panasonic DMC-LZ7 has a zoom lens which will zoom from 37 - 222mm equivalent focal range. Price, around $155.00

2) The Kodak Z712 IS is a seven megapixel camera with a Schneider-Kreuznach Variogon-branded 36 - 432 mm equivalent 12x optical zoom lens. Price, around $203 at buydig.com

3) The Canon PowerShot A720 IS has a 6x optical zoom lens - an equivalent of 35 to 210mm, and is priced at $217.00 at buydig.com

All of these cameras have image stabilization too. So you have a choice. If you want extreme zoom, #2 will do that without costing too much. If you are price conscious, then #1 is the best price. If you want a camera that is very high quality and probably the best image quality of these choices, look at #3.

Check the Canon G9.