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The image quality with a DSLR will be far greater than a P&S, let alone the ability to shoot instantly and continuously, and your budget will allow it. The main players are the Canon XT/XTi and Nikon D40/D40x, and there's tremendous value on the market coming from the Pentax K100D/K10D and Olympus E-410/E-510.
In your price range, the quality of the kit lenses will be important. I think the Nikon and Olympus is strong there, and I'm not sure about Pentax. Nikon has a lens that causes many to go with their system, the 18-200 VR. There's a tremendous value in not having to change lenses for different shots and introduce dust into the camera. On the other hand, a kit with an 18-55 and adding a 70-300 VR will give you more range at the track.
Do go to a camera dealer and handle the different cameras. One may work a lot better for you with its ergonomics and handling.
Ask for 2 or 4 GB memory cards, a Hoya circular polarizing filter, an extra battery, a tripod, and Photoshop Elements. Shop online at pricegrabber.com and check out the seller's reputation at resellerratings.com and be sure to deal with a factory-authorized dealer.
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