I wouldn't go for less than a DSLR. For your budget, buy a used one. You won't get a Leica for that money, but a Nikon D50 or Pentax *istD family member should be within your reach.
Nikon has the better software support, but I'm an old Pentax fan, so I'm biased. (The Pentax K10D is next on my shopping list.) Canon supposedly has the best (affordable) DSLRs on the market, but I never used one, so that's just hearsay.
I cannot recommend using lenses made for analog SLRs on a DSLR, there are just too many issues with it that basically ruin the experience. The Sigma 18-200 is an acceptable "always on" lens when you don't have the money to get a decent set of fixed focal width lenses, and it's available for most camera bodies on the market. I think it's a good start.
Nikon has the better software support, but I'm an old Pentax fan, so I'm biased. (The Pentax K10D is next on my shopping list.) Canon supposedly has the best (affordable) DSLRs on the market, but I never used one, so that's just hearsay.
I cannot recommend using lenses made for analog SLRs on a DSLR, there are just too many issues with it that basically ruin the experience. The Sigma 18-200 is an acceptable "always on" lens when you don't have the money to get a decent set of fixed focal width lenses, and it's available for most camera bodies on the market. I think it's a good start.