As you may have heard from other photogs, the lens you use on a camera has much more to do with the quality of image than the camera body itself. For the average user any entry-level SLR will meet their needs comfortably. As you move up the ladder to the higher end models you are essentially gaining things like focus zones (the number of autofocus “points”), burst mode shooting (take more pictures quickly), advanced customization (i.e. ability to program what buttons do), faster response times and more recently different video-shooting capability.
Most Canon SLRs these days come with a kit lens such as an 18-55mm zoom. These lenses are widely regarded as being “good for the price” but in general they are mediocre “slow” lenses. Having a “fast” lens (that is, a lens that is built to let in a lot of light) is, in my
opinion, the single biggest thing that can improve the quality of your photographs. Fast lenses let you take pictures without using the on-camera flash, so you end up with more natural looking photographs.
Fast lenses also allow for shallow “depth of field” which in a nutshell is what you are seeing when you look at a photo with a sharp subject and a “blurry” background. Lens speed is determined by maximum aperture, which is expressed in an f-number such as f2.8, f3.5 etc (the lower the number, the wider the aperture and the more light coming through the lens). Combine natural light with shallow depth of field and you get pictures that most people think look “professional” without even knowing why.
There is a catch, of course – faster lenses require better glass and thus need to be manufactured to closer tolerances and are thus (relatively) hellishly expensive – with some notable exceptions. As an example, my main lens at the moment is this this Canon EF-S 17-55 -a fast wide angle zoom lens. This takes nice photos in virtually all lighting conditions. The fast lens that I have my students use is this Canon EF 50mm 1.8 – an even faster fixed length but very cheap lens. As you can see there is a huge price difference – again, this comes down to build quality and materials (metal vs. plastic).
I’m not suggesting that you run out and spend $1000+ on a camera lens (of course, if that’s what you want to do, go for it!) but I think it is important to know that SLR cameras shouldn’t be considered a “magic bullet” of good photography, especially in their typical out of the box form. If anything, I’d strongly recommend something like the 50mm lens I linked above, or even a fast off-brand zoom such as a Sigma 17-70mm f/2.8-4 – however even this lens is still going to run you around 500 bucks.
You are leaning towards an SLR, but I will caution you that many people underestimate the added bulk that these cameras present both physically and visually. With an SLR taking pictures tends to become more of an event – you can’t just slip it into your jacket pocket and pull it out at a moments notice. With a larger camera you end up carrying another bag that’s buckled and zipped up – and “should we take the camera” becomes a question that you’ll consider every time.
There are some really nice point and shoot cameras on the market these days – they are increasingly coming with fast, high quality lenses and take very nice pictures. The general drawback to point and shoot cameras is that their smaller sensor size hinders the ability to get shallow depth of field in your photos (for complex physics-y reasons that I don’t fully comprehend) but that hasn’t been much of a problem for us thus far. At this point I don’t even keep an SLR in the house - it’s at school as that’s where I use it the most. 99% of our pictures are taken with Lindsey’s Powershot. This Powershot looks to be a very nice point and shoot camera, for example.
Don’t let me steer you away from going for a full blown SLR – they do take great pics even without aftermarket lenses, but they do have limitations which I hope I have outlined clearly above.
Hope it helps, and if the above leads to any more specific questions feel free to leave them in the comments.