After a serious research and hunting for a cost effective camera, I zeroed in on the Nikon D40 earlier. However, after a little more research and analysis I decided to go for the Rebel XT, the EOS series Digital SLR from Canon.
This is a 8 MegaPixel camera which came with 18-55 MM lens Kit. I will not speak more on the technical configuration, as the camera model link above will give you all the details (even those which I will not), but will speak a little bit on my experiences.
Well, the first think I will need to admit is the ease of use of the camera. The menu is very user friendly and you will not need to go through the manual too, if you have already handled a point-and-shoot camera before. I felt that the operation is much better and easier than point-and-shoot and also other cameras in its category. I have been using a Pentax ZX 50 Analog SLR camera for about 6 years now and recently bought a Nikon Cool Pix point-and-shoot just to capture small moments when I do not carry my Analog SLR.