I just picked up an Olympus E-420 w/ lens at Walmart for $399. I bought it as a "pocket" camera to use when I don't want to lug my D3 or D200 around, and I have to say, I'm fairly impressed. Even with the smaller sensor, high ISO noise is better than the D200 in most cases. It's light, very responsive, decent build for what it is, and very, very petit for an SLR, which is perfect for my use. Kit lens is tolerable, but slow, though even with no IS/VR I still can get sharp shots most of the time. Canon may be a better setup in most cases, but for the price/performance ratio, the Oly is a good option.
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