I'd rather get a new Strider than a new camera
I've used the Coolpix 995, 3 megapixel, which means it'll take pictures of a high enough resolution to print 8" photos from.
Very nice macro mode, has a million settings if you're the type that likes to play with those. With the macro, you'll be taking great up-close pictures of all your knives.
Cons are that it's bulky and you have to press a button to pop out the flash unit. Also a little old, since I believe there's a new model out already (probably not yet in the US).
Coolpix 895 is the smaller version, only 2 megapixels. I'm not too sure about the functions, but it's kind of fat/stout looking. I would rather get a smaller 2 megapixel camera.
There are too many "good digital cameras" in the $300-$400 range, I'd say it's equivalent to suggesting a "good knife" in that range
Two other cameras you should look at are the Minolta Dimage X (very, very small and pocketable) and the Sony Cybershot DSC-P7. About $400, these are smaller cameras with less functions. If you plan on taking detailed up-close shots, remember to get a camera with a macro setting.
Might want to ask around in the Digital Photography section of BF (or is it KF? I can't remember). Hope this helps.