Digital Camera's are so cheap, I got mine for like 350. I can take full video at high resolution, it has a pull out swivel viewfinder, and plenty of features that allow me to do things like take all of the color out of a video or image as i'm taking it, except for whatever i'm pointing it at and set it to. Also swapping that color with any other color on the spectrum, and just applying many other special effects and filters. Just keep in mind you'll have to fork out for a memory card, in my case I had to go with a gig since my camera is 5 megapixel and takes video at a high resolution too.
But you really only want that for fun and vacations, if you want to get into photography you need to get into more than just the point and click. This means darkrooms, actually getting to make prints the way you want. You need an SLR. I love my Cannon Rebel T1, and it's a deal at about 400 dollars. Though there is a newer Cannon Rebel G1 that my sister got because she was lucky enough to buy her camera a year later, when it came out. But, for many, an older Cannon or Olympo etc is nicer. People like the more mechanical style, and the more heavy and solid structure. It's really hard to break those. Plus, they are cheaper. Though as I always argue, i've got fully manual controls on my camera that work well.
