Take a look at the Panasonic DMC-FZ30. It may be a bit more than you are looking to spend, but it should be way cheaper than a DSLR. And the pictures I've seen taken with it are great. It's a point and shoot, but it also has a manual focus ring, a hotshoe for an external flash and the ability to add lens converters, like a 2x, wide angle or macro lens. Basically, it's a point and shoot with the features of a DSLR, except for the interchangeable lenses. It's main features are a 12x optical zoom, 8 megapixel and image stabilization.
You'll also need at least a 1 gig memory card and a spare battery pack (you can find cheap replacements if you look around; they're not Panasonic brand, but the price is way better), so you'll need to factor the price of those into your decision. I also think a good camera bag is an essential as well.
For reference, check out some of the pictures I have posted on this board. All were taken with a Panasonic DMC-FZ5. I've been extremely pleased with this camera, though now I'd love to have the extra features found on the FZ30.