What I did is I bought 1st a $200 digital, then a $300, then a $400, then a $500 digital, etc. each one pretty good, but not good enough. So I would get the next one. Dont be afraid of the nice SLR's - they have a button that is called Auto (french for 'use this button if you dont know anything about camera settings') - and that button turns the camera into a point and shoot which you can use until you finally sit down and rtfm (read the .... manual).
By the way, had I bought the Canon 40d up front with the lens, I would have been ahead about 500 bucks.