ango xc,
points taken.
i had said that the p and s useage of dslr was 'imo'
i personally dislike the navigation on the lower models and for 1k less and 1kg less i would opt for an s90 or g11.
i would also prefer a photo taken on a cheaper camera that is composed well, to a photo that is taken on an expensive camera poorly.
i agree that auto is a greta feature, however why shoot it on a dslr and not a p and s? if you're shooting on auto, you're probably not going to notice a lot of difference in the image anyway or gain an understanding of what each setting achieves and does in a photo.
p and s' can achieve fantastic results these days.
i don't really know anyone who's ever downgraded once getting in to photography, rather people upgrade and lose money selling their second hand camera gear to buy a better body/lenses.
i think for the budget op had, 40d is great, $600ish for body then plenty of money for a good lens and accessories. i think the navigation is intuitive and easier/faster to access than lower models, plus it has auto features. but then they want movie capability.
given i've said that i don't like the navigation of the lower models, the 7d was the logical answer for me to suggest.
so my actions plan would be:
get a model that is not a dslr that has av, tv and m capability. save 1k
learn how to use the settings well and compose photos.
save and buy a mid market dslr second hand in a year or so.
this way there is no loss in money as the p and s can still be used as a carry round camera and they won't 'outgrow' the camera they buy.
having said this, a mate bought the nikon d90 with twin lens kit for $1700 with $200 cashback. certainly worth checking out for that price.
paulb,
i agree, more people getting in to photography is a good thing and the digital age has brought an expensive hobby to the masses at affordable prices.