I just made decisions/purchases in this area.

For everyday snapshots, pictures of the kids/family events, and general purpose stuff, I picked up the Minolta DiMage XT.
Here's the Steve's Digicams Review. The XT is small enough that you can carry it in your pocket without knowing it is there. It is just over 3mp, and takes great pictures, as well as mpeg movies. About $300 on Ebay

For my more "serious" stuff as a amateur photographer, I also just bought a Canon EOS 10D. It is without question, the best digital camera that I've used. Fabulous color, quick response, great autofocus, and configurable as all get out. Only downside is that it is big (which is why I think you need two cameras). $1400 + cost of lenses (I bought a 28-105mm and a 75-300mm)
Review is here.

I've heard great things about the Canon EOS Digital Rebel. Just coming out now, and should run $800-900. It uses the same internals as the 10D, with a few of the customizable edges knocked off. More can be found here.

A good chunk of the above was paid for through the liquidation (on Ebay) of all of my film cameras (Canon A1 35mm, Canon EOS Rebel 35mm, Canon APS Elph, Nikon Pronea 600i APS), and my old digital Sony Mavica FD81. Given the current quaility of online picture printers (like snapfish.com, ofoto.com, etc) and the high quality of HP and Epson inkjets, I really don't see the need for film cameras anymore.

Regardless of your camera, I cannot recommend Adobe Photoshop Elements enough. It does 90% of what Photoshop does for about 10% of the price. Truly a "digital darkroom" for the amateur. Well worth it!

Let me know if you have any questions...

[This message has been edited by skofarrell (edited 09-29-2003).]