Digital SLRs are just hitting the main stream. Purests will argue they are not up to par with their film counterparts, but I argue they are better. Actually, the truth is they are different. There are advanatages to DSLRs over film SLRs, just as their are disadvantages. With that said there is a wide range of DSLRs starting with the just under a grand group ranging to the many thousands of dollar models.
A lower range DSLR usually has a 5 or 6 megapixel sensor, while upper range DSLRs range from 8 to 14 megapixels. I feel that 6 megapixels is enough to get good quality images and with some enhancement in Adobe Photoshop have printed crystal clear and sharp images up to 13" x 19". Of course having more megapixels gives you the ability to print larger or crop a section of an image and blow it up. Another important variation is the buffer and amount of images that can be taken per second. Lower end models can usually take 2-3 frames per second (fps) and store about 8 images in its buffer, while higher end models can take as much as 8.5 fps and store 40 images in its buffer. Sound like overkill? No way, I took my EOS 1D - Mark II to the Olympic Trials and filled the buffer constantly.
The advantages of DSLRs are numerous, but most importantly is the ability to leverage your exisiting lenses and utilize the wide variety of existing lenses. Some cameras like the Olympus E-1 uses its own new digital system of lenses. I would be wary of going this route. Personally I think that lenses last far longer than a camera and buying lenses tied to a specific camera can be risky.
Some of the other advantages are improved shutter lag, reduced noise, and more precise manual control. While the point and shoots used to be horrible at some of these features, they are improving.
Point and Shoots
The range of point and shoot digital cameras is impossible to keep up with. Each week more and more models arrive, each trying to grab a piece of the growing digital camera market.
When selecting a point and shoot camera you have to be very careful. First, know what is important to you. Most point and shoot cameras have major drawbacks over their DSLR equivalents. I usually recommend people read reviews about what people didn't like about a camera as opposed to reading what people liked about it. If the gripes people have are not important to you, then that camera may be a serious consideration for you.
Keep in mind, price usually effects quality. Really cheap digital camera may take an ok picture under perfect conditions, but will often fail miserably when used in less than ideal situations.
Complainst often raised about point and shoots are that the shutter lag is unexceptable, shooting in poor lighting becomes almost useless, higher noise at higher ISO speed equivalents, poor battery life (this is improving), and bad view finders. Again, the best thing to do is check http://www.dpreview.com for the latest camera reviews.
Alternative Media Cameras
While most digital cameras write to Compact Flash or Smart Media cards, another breed of cameras writes to either a CD or DVD. I am not a big fan of these cameras. Bulky by nature, I do not like storing images on an easily scratchable or worse breakable CD or DVD. Dont' get me wrong, writable optical media is great for storage, but I wouldn't want to carry them on a vacation or trek. Instead I like the compact flash format with a backup device. Also, note the CD-Rs and DVD-Rs have a limitted lifespan, they are not permanent.