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BuyDig.com has the Pentax K2000 10.2 MP Digital Camera with 18-55mm Lens for $420 + $7 shipping = $427 shipped. [Compare]
10.2 MP, 3x Optical Zoom, 2.7" LCD, Focus System, Viewfinder
1280x720p 30 fps HD Movie Mode, Optical Image Stabilizer, SD/SDHC, Shake Reduction
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records hd?
Can I return it if it fail to record video?
doesn't Pentax always use sensor-shift image stabilzation?
#3, yes, this is sensor-shift stabilization, which corrects for up/down, sideways, and rotational movement. Every lens gets stabilized, even your 30-year-old ones.
#1 and #2, I think the K7 does video... I doubt that this one (the K2000) does.
At $427, this is a heck of a deal for an first DSLR camera!
Why buy pentax when you can get a D40 for less...
#5 in short, because a d40 is crappy. The d40 is 6mp and only uses APS-C specific lenses. The Pentax is 10 MP, will use every Pentax mount lens ever made - full frame or APS-C, has built-in shake reduction, and uses AA batteries.
Neither of these two does movie mode. The pentax kit lens is generally regarded as decent quality for a kit lens. I've only heard bad of the cannon/nikon kit lenses.
#6, it's not even the MP or lenses. The features on the D40[x] and D60 just suck compared to everyone else -- Canon, Olympus, Pentax/Samsung, Sony, etc...
The Pentax K2000 is a tad crippled as well from the standard Pentax line, although due to Pentax build standards (stainless steel body and steel mounts, lens rings, etc...), the body won't crush like most entry-level dSLRs. One's gotta love the "standard build quality" of even $100 Pentax lenses. Pentax is really the expert-amateur choice. Even if they don't make huge, fast, mega-sized/priced Pro lenses anymore, their compacts are outstanding from low to high-end -- and Canon and Nikon owners who buy the equivalent Tokina agree (although the Pentax builds of the same glass are better and have more features).
I'd splurge a bit more for a K200D or K20D. If you're really worried about size and weight, the new K7D is smaller than an Olympus (which uses a smaller sensor, 4/3rds), and adopts a magnesium alloy body (like the D300). It also adopts many other features (the 1Mpix LCD, 5fps, etc...). I'm personally waiting for the K7D to drop in price. I'm planning on selling either my K100D or K20D if anyone wants either at that time.