The E500 is a great camera, and you can get a twin bundle kit lens for around $800. Compare to other dSLR, the image quailty at iso800 and 1600 is not very impressive, but compare to other non-dSLR cams, it is noticeably better. You should get one home from a local store with a good return policy and see if it suits you in a real-world setting.
Note that with dSLR it takes lots of skill to master proper focusing because its narrow DOF is not as forgiving as small-sensor digicams, but once you get the hang of it, it should do its magic with super-fast burst mode and zero shutter lag.
Also most dSLR out of camera pics are a bit dull and soft as they expect to let you do the proper post-processing yourself.