[Westbrook]

Olympus EPL-1

http://thephoblographer.com/2010/04/06/hands-on-and-hands-off-olympus-epl-1-review-nyc/

This is the micro 4/3 form factor DSLR. You can get it for $440 at B&H Photo, very reputable shop, by the way.
http://www.bhphotovideo.com/c/product/674722-REG/Olympus_262861_PEN_E_PL1_Digital_Camera.html

Also shoots 720p HD video.

It comes with a telephoto lens, but you will also want to get this “pancake” telephoto lens.
http://www.bhphotovideo.com/c/product/651751-REG/Panasonic_H_H020_Lumix_20mm_f_1_7_Aspheric.html

With a pancake lens, it will fit in your shirt pocket! The lens has an f/1.7 rating for excellent light sensitivity.

If you wait until May, you can get the EPL-2

If you just want a point-and-shoot, I can recommend the Nikon CoolPix s8100
http://www.bhphotovideo.com/c/search?Ntt=nikon+coolpix+s8100&N=0&InitialSearch=yes

[Westbrook]

Oh, the Nikon CoolPix s8100 point-and-shoot also shoots 1080p HD video.

B&H sells them for $299, but I picked one up for $249.