Thank you everyone for all your valuable suggestions. I finally took a Canon EOS 1000D with a kit lens. I wanted to go for a 450D but it was going a bit above my budget, so went for 1000D as I am just a starter.

The first piece that I took had some defects and it was really nice of the seller who replaced the whole set after 5 days of my purchase.

What I couldnt understand is that after purchasing a sealed packed piece, when I took the first snap, it was numbered 879. I guess a new camera should start with 001.
Secondly, as the kit lens didnt had a IS, most of my pictures get shaked, may be because I dont have a very stable hand. Any recommendation for that.

Last but not the least, even after taking a picture from a tripod, the picture doesnt seem to be very sharp. What I mean is when I used to take pics from my old Sony P200 P&S, it used to capture amazing skin details which this camera doesnt. I believe a bigger sensor should capture much more details. Am I going wrong some where?