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@Radius
'Tis fair and valid to say if you're going to upgrade, go for a dSLR. Another thing to watch out for though, is that with the D40, D40x, and D60, which are within your budget, they only take Nikon AF-S type lenses (those with a built in autofocus motor). That sounds confusing, but what it essentially means is that you are limited to newer Nikon lenses, or much newer third party lenses, rather than being able to pick up old Nikkor AF-D lenses and older third party (Tamron, Sigma etc) for less cash. On a better current body (D90, D300), you could do this, or on a secondhand older body (D80, D200, even a D50) you could do this. Nikon have slightly crippled their low-end offerings, which makes the bodies cheap but the expansion of kit at a later date much more expensive. I may come back and edit this later as I wrote it quickly and it might be a bit esoteric. HTH