Since I inserted a Crucial high speed 265MB SD card and made a 4
minute video recording, longer than my usual 1 minute recording on a
64MB card, my digimax 530 crashes/freezes any time I record for more
than a few seconds. The time to freezing/crash can vary from 10
seconds to 1+ minutes.
When it crashes, I cannot turn off the camera. I have to take out the
batteries and wait for a few minutes before replacing the batteries
would reinitialize the camera.
I tried different batteries with the same results.
I also tried recording on a 64MB card that I had used with no problem
before - same problem.
I also tried using the internal memory - same problem.
I never had these problems before.
Playback also causes freezing.

The camera is about 3 months old.

I also noticed that the longer I leave the camera empty of
batteries,the better it seems to correct it's self and the more time
it records before freezing.

Is this possibly a capacitor problem?
Would leaving the camera unused and free of batteries for a few days
correct this problem?

Please help me out here.

(Hope researchers don?t object to this pre-emtive comment.)

Sorry to report that your camera has died. Should still be in
warranty, though this may be a problem for you.

Diagnosis is not really possible, but since you declare interest on a
component level a capacitor is unlikely to be the cause. Most likely
one of the chips has gone flaky -- you describe a reasonably common
failure mode. You have (intelligently) exhausted all the other causes.

Leaving it without batteries for a few days won?t effect a permanent
cure but you might find that it lasts slightly longer if cooled first.
On a bench, tracking down which component is intermittent or
time-dependent, one often uses a heat source and freezer spray to
precipitate the fault and temporarily restore function. Not the sort
of thing which the average person could do -- and there is absolutely
no danger of being able to get replacement components I?m afraid. So
regretfully, back to the shop :-(

Best