Hi,
I usually spend a pound or two on P&S's because I figure I won't then burst into tears if they turn out to be U/S. Now and then I'll stretch that to a fiver if I think it worth the risk on (say) a mju-II or XA etc. I've bought awful cups of coffee for that sort of price and so it's my yardstick.
FWIW, Last week I bought two at 2 pounds and yesterday one at 3 and one at 7 as it was in the box with everything (but the battery will probably need replacing soon).
Really it boils down to what cash you can waste without crying balanced against a bit of fun/profit with the good ones.
BTW, I mentioned earlier that cameras should have manuals, lens caps and so on. They can cost a lot, lot more than the camera.
Regards, David