Advice on an entry level SLR

Hello all!

I've decided to pursue my interest in photography and get myself an amateur level digital SLR and lens for about $400 - $500, camera and lens included.

My main interest is portraits, but if at all possible I would like to get a lens that will work under a moderately broad range of situations so that I can explore some other types of photography and see what I like.

I have heard some good things about Nikon, so at this point I'm tentatively looking at a Nikon D40.

My main question then, is what kind of lens will I need to start myself off? Most that I have been looking at are auto focus lenses. Are AF lenses a good thing for beginners?

Here is what I've come up with so far:
Nikon D40 body + 18-55mm f/3.5-5.6G ED AF-S DX Zoom-Nikkor Autofocus Lens Kit (I'm not actually sure what all those numbers mean.:confused: ) Such as this:

http://www.bhphotovideo.com/bnh/cont...yUsed&Q=471716

Would this be a good buy for my situation? I am mostly unsure as to the lens, and what kind of lens I should be getting...I honestly don't know anything about lenses. :D

You advice is much appreciated!! Thank you!

--> Mily