David,
We're doing exactly the same at the moment.
We have an old Nikon Coolpix 5000 that is being retired.
We looked at Nikon and Cannon but both have image stabilisation in the lenses which means you need to buy very specific lenses to get it. The correct lenses cost a good deal more. Note some other brands do stabilisation by altering f stops to increase shutter speed but this isn't true image stabilisation.
Both these cameras were priced around 1,200-1,500 Aussie.
With you budget (which is around what we're happy to spend) we look like going with the Pentax KX (
http://www.digitalfunstuff.com.au/prod1222.htm ) as it does a lot more than an equivalently priced Nikon or Cannon will do plus the stabilisation is in the body which means our old lenses will work with it.
Rather than using two lenses (as most "kits" supply) we're going to go for a single 18-200mm lense to save carrying the second lense and having to change it all the time.
Whilst the Pentax doesn't have the "cred" of carrying a Nikon we used an SLR P30 Pentax for 10 years and took it off road racing and it bounced around the car for days on end and still kept working perfectly. We only replaced it to go digital.
Another thing is Nikon and Cannon won't do video unless you buy units priced at around $2,000 whilst the Pentax will. Some DSLR's now don't allow "live view" which means you use the viewfinder like you did pre-digital and you can't see the image in the TFT screen.
The Pentax has a slightly lower pixel count (12.4m) but unless you want to print posters anything over 8 megapixels is way more than adaquate.
No camera in the price range will have a flash range in excess of 3-4 metres (10-13 feet).
I'd be interested in other peoples ideas as I won't be buying for a few weeks and they may show me something I hadn't thought of.
