A lot of people like to recommend the D40. I honestly think that camera is overrated. If you already understand some basic shooting like you've used the advanced P&S (I came from a Powershot G3), then a dSLR is not that much different. I thought the 9pt AF of my Rebel was insufficient, but I just can't bear the 3 point AF at ALL on the D40. It's a joke. Without cross point AF either, it's quite useless in low light. It's a hunt fest.
I have Nikon friends who ALWAYS (and I just heard the rant today again), but it's always the D40 recommendation. Seriously. I know MP isn't everything, but somedays I feel sad for their 6MP. I love cropping the hell out of my 18MP and still maintaining excellent detail.
My Canon friends are funny though. They ALWAYS recommend the 5D2 to almost everyone... even newbies. LOL.
I say it all depends if you're gonna grow or not. I take on lots of hobbies, and I usually push them to a certain extent. Usually my first everything comes out to be insufficient. My first snowboard was an excellent $300 starter board that had intermediate capabilities. My bindings were top notch beginner/mid-range ones that even my advanced rider friends rode. Well, I outgrew them after 2 seasons and I jumped on some midrange $550 board (Burton Custom).
The same with photos. I thought a Rebel would be fine, but I soon wanted more. 7D I went.
If you see yourself growing, there's nothing wrong jumping straight there. There might be a little suffering in the beginning, but you'll save money
