Alot of the replies here will probably be personal opinion, of course. I would suggest maybe waiting and saving just a little bit more. I have a Digital Rebel XT and I've been nothing but happy with it. The kits (granted, the kit lens isn't the best, but it's not horrible either) you can find for around $600 if you look hard enough. The newest Digital Rebel is the XTi, but I think you'd be looking around $800 for the kit.

Of course, if you can save up a bit more I'd recommend buying a body (~$499 for the XT body) and then buying a decent lens (such as the Canon EF 28-105mm f/3.5-4.5 II USM which I bought used for $199 and has been a great walk-around lens).

Of course, even tho I'm a Canon guy, the Nikons are nice as well, but I'm not really up to the pricing on them. It's probably similar.

-Melen