I've had four friends ask me this very question as they all feel ready to upgrade from their point and shoot to a DSLR. The single lens reflex digital camera has long been priced out of their reach but technical advances and production improvements have brought these cameras into the sub-$1,000 mark. Although I am a dedicated Nikon shooter and use their DSLR cameras (D3, D700, D200, D70) for my professional work, I have no problem recommeding the products of other manufacturers. I am wedded to Nikon because I grew up shooting them and I'm married to the ergonomics of the camera - subcomand dials and focus locator are just in the right place for me. I actually bought the new Canon 5D mkII but couldn't get used to it and took it back for the Nikon D700. Anyway, I digress....
Look at the Panasonic GH1. Panasonic? Indeed. I am actually considering this camera for personal use (although I need a new camera like a hole in the head). Here is the link to the camera preview that appears on Digital Photography Review: Panasonic GH1
The camera comes out later this month. It's the smallest DSLR on the market but has a great chip in it and can shoot HD 1080p/24p with Dolby Digital Stereo video with autofocus. Light, portable but a performer. The 14-140mm lens will also cover most everything. It is a bad little camera that performs in a big big way.
The second suggestion would be the new Canon 500D/REbel T1i. Shoots HD Video 1080p/20fps and 15mp sensor. For the price and the performance, this camera is the full size DSLR to get, far superior to the Nikon D90 or equivalent. I would try and find these cameras and play with them and see what you think. Here is the Canon 500D review.
I don't have anything against Nikon but they are a smaller company that these other two and they are late to video (and Canon has been doing that for a long long time). I'm waiting on Nikon to catch up on the video thing.