I have an HP Photosmart 7960. The photos are very good quality but that thing is EXPENSIVE to operate! The better the quality you want, the more you're going to pay not only for the initial printer but also for the ink and paper.
I also have an Epson that I use for photos and it works fairly well. About half the cost of the HP and the ink is a bit cheaper but still good quality. And if I don't use the printer enough I may have to deal with dried out ink and cleaning the printer.
I also prefer having the really good prints done by a shop (I like Snapfish) and the quality of having it done is much better than I can get at home and the price is good, too.
You could also look for a sale where they practically give away the printer. I bought a Nikon S30 and got an Epson PictureMate free. (4x6 photo size only. Never used it. Someone will get it for a Xmas present!) I also have a Canon D20 but the Nikon is good to just carry everywhere in my pocket.