Hi leela,
Welcome to the Q&A Board.
Most printers will make post-card sized prints. While we don't make digital camera or equipment recommendations per se, from personal experience I can tell you that Canon and Epson make excellent printers. I have several friends who use HP printers, and they are pleased with them too.
You can buy a photo quality printer for between $100-$150. Ironically enough, some of the real cheap printers which use single ink cartridges use more ink. Most manufacturers don't make a heck of a lot of money on the printer itself, they make it on the supplies.
You should consider buying a printer which uses individual ink tanks, so you only replace the empty ones when needed. Most studies have shown that single ink cartridges save you money because you don't discard unused ink as you do with single cartridges which contain several colors.
Most printers today are PictBridge compatible. Whether you need it our not, I'd say only if you wish to print directly from your camera, which must be PictBridge compatible too.
Related reading:
PictBridge:http://www.digicamhelp.com/what-is-pictbridge/Inkjet cartridges:http://www.digicamhelp.com/inkjet-supplies/inkjet-cartridges.htmMoney saving tips using an inkjet printerhttp://www.digicamhelp.com/inkjet-printers/money-saving-tips-using-an-inkjet-printer.htm