Around spring of last year I knew almost nothing about photography other than "point and shoot". At the time I had a fixed-lens Olympus 3.1MP camera. It was OK, but I soon realized its limitations in using the flash and the slower focusing and picture-taking response.
I decided to learn a bit more about taking pictures and bought the
Cannon Rebel XTI for around $800 (back then).
I am very happy with my purchase and using an SLR was so much better than my older camera. The shutter responds instantly and you have the freedom to do exactly what you want once you LEARN how to take pictures. And while you are learning, the automatic settings are pretty good provided you have proper lighting.
They recently came out with a newer model, the XSI, so the XTI is even cheaper now.
These were taken with mostly automatic settings and with the "cheap" 18-55mm lens that came with the camera (left the EXIF in on a few):