Have had an eye on a digital SLR for some years, but never got around to taking the plunge until this chap came along.

I'd been using two Sony cameras, which were very good for general family shots. However, as my sons got older and started playing rugby and football, they just couldn't keep up. DSLRs don't suffer from a delay from pressing the shutter to taking the picture, and so the moment isn't lost. Also, it has a three frames a second speed, which is brilliant for sports shots. I use with a 4Gb card, which will take over a 1000 shots, even at max resolution. Don't think I've ever used more than 500, but it's nice to know there's still plenty of room!! It will take the newer SDHC cards, but not all computers can read them directly [most come with an adaptor].
Obviously a bit heavier that compacts, but there's no comparision in quality.

If you're considering buying on of these, I assume you'e already read about DSLRs in general, and I guess you'll be looking at this, probably a Canon EOS and possibly a Sony. I chose the Nikon because, although it's heavier, it is a better build quality [unless you move up to the EOS 30D, which is much pricier]. Realistically, they will all give very good results, and unless you're a serious pro, you might not see the difference (I'm sure I wouldn't!)]. At the end of the day, you need to pick them up and see how they feel for you.

Battery life is excellent, will easily shoot 500 shots outside [I don't use the flash much, so can't comment on that]. I took it on hols for two weeks, and didn't need to re-charge when I was away.

You can buy the camera as a body only, or with an 18-70mm zoom, or a 18-135 zoom. The 135mm version is only £10 more at Jessops and, since it will enlarge almost twice that of the smaller zoom, I can't really see the point of the smaller one.

You can then buy extra lenses, either Nikon branded ones, or from third parties - you can pay anything from £100 to thousands. That's why I went for the 135mm, as it will delay the need for a new one.

Remember, an expensive camera doesn't guarantee great pictures, but this will certainly give you a fighting chance of getting pictures which you might not get with a pocket camera.
[This is an updated version of some comments I've written before]