I would just go with a DSLR and skip the middle ground.. with the newer cameras coming out soon.. you can pick up a Nikon d40 for like $500.. I would also inquire about a used D50.. these run for around $450 or so adn the kit lens will cost you a bit over $70 used. A bargain and you'll never look back. And.. don't spend too much on a body.. in the beginning, you'll be totally overwhelmed as is and with newer models comingn out all the time, you might actually be picking up a new one in a few years..

However, keep in mind that once you move to DSLR.. there are other costs involved - as you get better, you'll want to scrap that kit lens and buy a good one - that can run you between $300 and $900.. you'll probably need a good camera bag for all you gear.. that's another $100 or so. Add on a flash, tripod and things add up quickly.

Good Luck.. do a search there are tons of discussion on this but I stand firm with my Nikon recommendation.