personally, I would reccomend a Canon 10D. It is probably about a 1-2 year old camera, and the image quailty is on-par (and usually a little better) than a 350D (rebel XT). Why i would reccomend the 10D? It will have a much better build construction and overall design versus the 350D. check out
http://www.dpreview.com for really good reviews. also, check out
http://www.fredmiranda.com for used 10D's, last I check there were a bunch for about $450 or so.
BTW- let it be known that I am partial to Canon. I do not (yet) own a Canon DSLR, but I really like their lense offerings (boy, there are a TON) and their cameras (based on reviews). I will say however that I "palmed" a Rebel XT and XTi once at a best buy and they felt a little... light.
EDIT:: i would also add, as a rebuttal to the Pentax from the above post... think long and hard about using AA batteries. For me, I will never use AA batteries in a camera again. bad experiences... I am MUCH happier with a single battery, even if it is a little less flexible.