Is the Olympus FE 170 a great digital camera?

It's actually quite nice for the price.
The only thing I could find wrong with it is that it uses XD Picture Cards for memory storage.
This card is getting very little support from the industry.
The Canon Powershot A430, the Pentax Optio E10 or the Sony DSC-S500 might be better choices for about the same price.

The Olympus FE 170 is an entry level camera, which means it is aimed at beginners mostly... It's cheap and it's easy to use, but dont expect any greatness from it.

Here is a quote from a review I found...

"The good: Simple to use; inexpensive.

The bad: Terrible performance.

The bottom line: The Olympus FE 170's price is hard to beat; its performance, not so much."

instead of olympus FE 170 you can go for canon A540 its a best camera.