Go for the Nikon D40 or D3000. You may have to get an additional 55-200 lens depending on your interest in photography. You will almost definitely get a bundle deal for around your budget during thanksgiving sale. Do keep an eye out.
If you are leaning towards canon, then the Rebel Xsi is good.
Before you buy one - Read lots of reviews online. Go to a store like bestbuy and pick the camera up in your hands and see what it can do and how it feels.
Also, get a UV filter and put it on the lens. Keep it always - it will protect the lens from sunlight AND most importantly IF you happen to bang it against something, the filter will take the beating! Replacing it is much less expensive than replacing the lens!!
We got the Nikon D90 when it launched and have been really happy with it

Got a couple of extra lenses as well!