• Unless you intend on spending a lot of time learning about the finer points of digital photography, like white balance, metering, exposure, depth of field, aperture, f-stop, etc, you should just stick with one of the many quality point-n-shoot digitals for the [above]average consumer.
DSLRs are designed to give you "blank canvas" type results to which you apply technique to achieve the desired photo. Point and shoot digitals are designed to give you the results you want without any fuss or fore knowledge of photographic settings.
For most people who just want a camera to take pics of their friends, kids, vacation, etc, a good point and shoot will produce, on average, a better result for them than were they to just pick up a DSLR, set it to full auto, and go.
What people usually go ga-ga over in regards to DSLRs is short depth of field, and just about every fixed lenses digital out there over 200 bucks has a portrait setting or something to get this effect without much fuss.
People see great photos from amazing photographers and just assume that it was the camera and think, "if I had that camera with it's super big lens I could take photos like that too! But they fail to realize just how much work is involved and end up worse results with a DSLR than they would with a good point and shoot digital.
• 10 reasons...
1. Tax shelter
3. Make some photographer you're attracted to think you know about photography
4. Brag about it to coworkers, relatives, etc.
5. As part of an insurance scam
6. Take pictures of your neighbors' stuff to sell on eBay
7. So you can pretend you're a paparazzi
8. To write reviews for your website to make money off of ads
9. Reuse the CCD for your home-brewed telescope
10. Because an internet article convinced you that you should
The biggest reason NOT to buy a dSLR is the size and weight. You might not think it's a big deal, but just wait until you've been on vacation and lugged around a bag with a dSLR, three lenses, extra batteries, and a flash. Because you do need a separate bag for a dSLR, you can't pocket it.
If all you want to do is take snaps of friends and family, and you want to bring the camera on vacation, then I'd say go for a compact instead. There's now some very good & pocketable compacts in the $200-$400 range, e.g. Canon Powershot A640 or 800IS.
• If you know something about photography, and want to get more seriously into it, then yes buy a DSLR. Otheriwise you are just wasting your money.
If you aren't the type of person who wants to get into photography and just wants to take family shots (photos around the house, etc) and some vacation photos then a DSLR is not for you. If you were to buy a decent - good p/s then you are fine.
The advantages of a DSLR are the lenses, the ability to shoot raw and the shooting modes. But if you want to play with the shooting modes on a p/s then you can, without spending the bucks for a DSLR. The quality of photos will be very similar either way.
One more point: for older people, being forced to use the viewfinder is a hassle. Using the LCD is a lot more practical.
The most important thing in photography is being able to take the right picture at the right time in the right spot. Period. A DSLR doesn't instantly make that happen.
The second most important thing is lighting. Lighting equipment is eating up half of my budget.
I can't take a professional picture with my professional camera in a nightclub that won't let me take it in. However, my Sony T1 has done that nicely. It also is the best for a vacation because I can take it anywhere. Now would I use it at a wedding or sports event...well that's when I'll carry 3lbs of bodies and 10lbs of lens on my shoulders.
Get a DSLR if you a SERIOUS enthusiast and your powershot is holding you back from taking the pictures you envision before it clicks. Otherwise go with portability and ease of use.
• DSLRs are like PDAs: if you're not sure whether you need one, you probably don't, and there's a big chance it will end up forgotten in a drawer, or at eBay for a loss.
For those who want to get deeper into digital photography, I would suggest getting a nice book about it first, or maybe attending an beginner's course, and play a bit more with the settings of your digital point-and-shoot(you might have a nice surprise). Then if you really get into it, you will naturally feel the need to upgrade to a DSLR.
The problem with DSLRs is that they are heavy - mirrors, metal, etc. That is if you want a good one.
I would suggest go with a DSLR if you're into professional photography and you can afford to carry a camera case around with you all the time. Otherwise, get something like a canon IXUS. It's small, easy to use, has good macro (surprisingly good) and is pretty stable. No need for a card reader, and it exports in simple JPG as opposed to RAW, which is the preferred output of some DSLRs (useful for pros, not useful at all for noobs).