You're going to get as many answers as there are people in this forum. Here's mine...
In photography, lighting matters much more than your camera. An el cheapo compact camera like a Powershot or Coolpix, can, with proper lighting (and maybe a tripod), give you results indistinguishable from a quote-unquote "professional" camera.
Some of those compact cameras offer resolutions as high as 8 or 10 megapixels... large enough for quality prints.
The reason for going for an SLR is to have full control over your depth of field and access to the wider array of lenses, filters, strobes, etc. But all of those things will begin to cost you more and more money, so it's usually best to purchase at your level and work your way up as you need (or want) to.
In compact cameras, I like Canon's Powershot, because it offers a full manual mode. This means that I can put the camera on my tripod and use natural light, no matter how dark, to get properly exposed photographs (by using longer shutter-speeds). OR, I can use desk-lamps and whatever else is around to compose my shot.
In SLR's, I use a Nikon D80. This is an entry level, "amateur" camera, though as I said, your camera matters much less than your lighting. With proper lighting I've been getting great results so far, and as I learn more about white-balance and composition, my photographs have been getting better and better. All that without the zillion dollar, high-end cam.