I still recommend nothing under 10 megapixels so as to not limit what you can do with your images. Also, you can get better glass than the bundled lenses. But whichever way you go, you will get better photographs if you use a tripod and set the camera properly for the type of images you are shooting. Don't think that editing in Photoshop (or similar editing programs) is the solution to mediocre images.

I have the Canon Digital Rebel XT and I love it, so everything I say is colored by that.

I agree with Larry that the more pixels in the sensor, the better off you are. But I have some very nice 11x14 prints I've made from 3.3MP images from my five year old Nikon 880 Point & Shoot. Unless you're intending to use these images professionally, I don't think that sensor size should be your PRIMARY consideration.

I think your primary consideration should be your lenses. That's really the reason you're buying a DSLR in the first place, isn't it? If not, you should take a serious look at the EVF and SuperZoom cameras on the market at the moment; they're immensely capable and may well give you what you want without the expense of a DSLR system.

Even with the most expensive camera body, your lenses are going to be your biggest investment and a Canon lens isn't going to match with a Nikon body. You're buying into a lens system, so your whole decision should start from that point. Don't forget that the lenses I get for my XT will fit any other Canon camera body I should purchase in the future - either film or digital.

I'm completely sold on the Canon system, but that doesn't mean the others aren't worthwhile. The real trick is to decide what you wish to DO with this system, then get whatever best fits those needs.

I absolutely agree with Larry about the tripod, or at least some way to keep the camera physically stable while making the shot. Though tripods are the most common, there are plenty of other systems like car-mounts or beanbags which will also work. Use a remote shutter release if you can; it'll reduce camera jiggle even more. Incidentally, the new Image Stabilization options are amazing and let you hand-hold a camera at slow shutter speeds without jiggle. Having said that, a tripod is still the best way to go.

Don't be afraid to use those automatic settings either. They're there for your convenience, freeing you to concentrate on framing the shot in the viewfinder. Photography is a process and every one of us is learning all the time. As you get more experience, you'll see how things like apeture and shutter speed affect the image. Though most shots won't require such fine control, it's nice that it's there when it's wanted. Conversely, it's nice to have those automatic settings to fall back upon when you just want some nice vacation shots.

Any thoughts from anyone on the Canon Rebel xti?

If I were in the market for a new "good" prosumer camera, I'd go for the XTi, but since I already have an XT which I love (and which has capabilities I still haven't explored after a year and a half of satisfied ownership) I'm more likely to spend that money on a lens than on another camera body.

Get yourself a new Pentax, that way you can use any existing lenses. They are excellent cameras, if your budget will stretch to it (which it sounds like it will) get the shake reduction. If you are worried about the 6mp thing, dont, read http://www.kenrockwell.com/tech/mpmyth.htm or one of the other sites that pull it to bits, and remember that the quality of each pixel on a dslr is much higher than that on a compact.