it comes down to a few things that you need to figure out first. all but one DSLR (and it's neither the cannon nor nikon, but I can't remember what brand it is) is sight through the viewfinder only, not the lcd screen. make sure when you get one that it's both the body and the lens, if you find a really good price then there's a good chance it's body only, but they intentionally obfuscate it sometimes on these sites. expect a general use lens to be around $100-150, specialty lenses up to $500 or even more. chances are you'll only use 1 or two lenses though. but still...
the GF has been trying both the rebel xti and the nikon d40x and finds she prefers the xti (we were told that canon did some kind of research survey and found most amature photographers were women, and so designed the body of the xtseries to fit comfortably in smaller hands)
for my personal X-mas gift I picked up a canon powershot S5 IS and I've got to say, I absolutely LOVE IT! it's somewhere in the middle between a DSLR and a point and shoot camera. it's got the point and shoot capability, but it's also much closer in size to a DSLR or a "real" camera. the thing I really like about it is the ergonomics of the button layouts. particularly the zoom toggles, rather then 2 buttons on the back of the camera it's on top up front and it's a single...I guess you could say sorta a hatswitch, around the shutter button. so it's a simple matter of moving your finger right or left to zoom, without having to really take your finger off the shutter button. or move the camera around. the whole camera fits comfortably in your hands. the lens cap pops off a bit too easily, but you'll find that you'll often accidentally turn the camera on without taking the cap off, and the ease at which it pops off helps prevent it from damaging the camera if you left the cap on. also the battery door hinge is metal re-inforced. since my nikon coolpix got scrapped because the battery door broke and wouldn't stay closed, this is a lifesaver. it's got a 12x optical zoom, plus there's the ability to put an attatchment on for either a macro lense or a teloscopic, and I beleive they've got a wide angle one as well. obviously these won't be as nice as the specialty lenses you'd buy for a DSLR. plus it's got all the little goodies that helps make point and shoot cameras semi-idiot proof. and is prolly the most customizable of the point and shooters. it comes with a 32meg sd card (another nice thing over the sony, everything uses sd cards, so no propriatary sony mem cards) and 4AA batteries, the card'll hold about 8 photos on the high setting, and the batteries'll run out after about 50 shots or so. I got a set of Eveloop (or something like that) rechargable batteries and they last several hundred shots before needing a new charge. so obviously you'll want to get better batteries and cards. I lucked out and got my camera right when everywhere was having a special on 2gig Scandisk SD cards at $18.99 each, and picked up 2. I've yet to manage to fill up 1 of them. It'll also do up to an hour of pretty decent video with stereo sound. the biggest annoyance with it though is that the sd card is under the battery door/cover so you've got to turn it off and open the battery compartment to get to your card. but with a decent sized SD card this'll be a minimum occurance.
if you want to see how it takes photos, my DA photogallery link is in my sig. admitadly with a bit of touching up in photoshop.