We were looking at a camera upgrade and were seriously considering the Nikon D50 and the Cannon Rebel xti SLRs.  My partners brother (who is a photographer) gave us a heads up on a new camera which has just hit the market.  The Olympus sp-550uz.  It is the most powerful ultra zoom out there with a whopping 18X optical zoom lens with dual image stabilization and 7.1 megapixel. 

We chose this camera for several reasons.  Price: $499.  Size:  A bit smaller and lighter than the SLRs.  In Camera Menu:  Incredible amount if info built into the camera menu system.  You can even select the type of photo you want to take and the camera will select proper settings for difficult situations.  Lens:  We mostly take wildlife and bird photos, so we needed a good zoom lens.  But, since we also carry this camera on vacation, we didn't want to have to carry around several different lenses all the time.  The SLR lenses are also very expensive, and we wouldn't have been able to afford a nice zoom lense for a while.  The Olympus is an ultra zoom and has it's lens built in.  Burst Rate:  We wanted to be able to take successive photos to catch action shots.

We feel that this camera is the best for our needs.   It is a step down from an SLR, but it is still a very powerful camera that comes with all the bells and whistles of it's big sisters.  It also comes with some pretty nice photo editing software.  Here is a pre-release review if anyone is interested in learning more.

http://www.dcresource.com/reviews/olympus/sp550uz-review/index.shtml

I agree that if you are serious about photography that a Canon Digital Rebel would be a great camera. The prices have come down considerably. If you decide to go with a digital SLR, you might want to consider getting a camera body rather than a kit so that you can select your own lens. I use Canon 20D with a  28/300 wide angle telephoto lens. Other than a few macro shots, I used it for just about every shot I took in Antarctica. It's  It's a great versatile lens. Karen

If your looking in to getting into some serious photography yet still on a semi-pro or consumer level you would want to invest in a Canon EOS Digital Rebel. This was my first Digital camera 5 years ago and it does the job extremely well.  I recently upgraded to an XTi of the same family. But please let me  remind you that no matter what your upgrade is, its all about you and y our vision, and a lil photoshop or fotofusion lol. Seriously, the digital era is getting bigger and better and I've seen basic point and shoot cameras do a pretty nice job. Canon EOS i believe has around 6 megapixels while the xti has 10. Dont let this fool you as your lens will the the trick of clearity, again depending on what you are shooting. Tell me more about your desires for a new camera, general purposes, get into business, lots of family outings and maybe I can be more helpful. Us photographers always have little secret places to find nice equipment at rock bottom prices. Check out bhphoto.com have beautiful prices on new and used equipment. I recommend them and I am not affiliated with them. Good luck, keep in touch and invite invite invite!