Again, being a Nikon man, I have gone for the Nikon DSLR Better entry level Camera.
Use the link below and have a look at the spec.
http://www.warehouseexpress.com/buy-...-body/p1031458
With a lens as part of a bundle it quite a bit over your budget, but this has got a good enough spec to last you quite a while.
While you are on the site, look at Canon for the alternative view, something like a 550D.
Also, have a butchers at bridge cameras.
Ideally, you want somewhere above 8mb.
Hope this helps.
Steve