I recently purchased my 1st DSLR, a Canon Rebel XS. I did a lot of research & the Rebel had rave reviews & seemed like a great beginner camera. Plus we had a Canon P&S so I am familaiar with their brand.
I checked everywhere for the best price for almost 2 months & ended up buying from Crutchfield & purchased a warranty through Square Trade.
I Love my camera! Really, having it has taught me a lot about photography. I knew nothing & really had no interest in photography. But having this camera makes taking pictures fun. I'm already wanting to get a macro lens or some other kind of toy for it.
There are lots of good cameras out there for under $500. Have a good look around before you make a decision. Good luck!