well any semi-modern hp deskjet has excellent support via cups,especially with the hpijs+rss drivers, adn the deskjet ppd, which provides nearly all services for hp's inkjets. luckily, the hpijs project provides great support for high quality printing in linux.
for you i would suggest the hp photosmart 5500, which lists on hp's uk site for £100, and there is support for hires printing in the latest version of hpijs (and cups). from hp's specs, it looks like it will print photos nicely.
hope this helps.
[edit] the latest hpijs drivers can, of course, be downloaded from
here