Digitals vs. Digital SLRs
You may have heard the term "digital SLR" and wondered, what is that? SLR stands for "single lens reflex" and denotes a class of camera where when you look through the viewfinder (the thing you use to compose your picture) you see what the lens of your camera sees (as compared with a point-and-shoot where you see a fish-eyed view of what you're likely to get). Most high-end 35mm cameras are SLRs and have brands like Nikon, Canon, Pentax, and so on. Many of those same camera makers have produced digital versions of SLR cameras.
Regular digital cameras use what's called a CCD (charge-coupled device) to compose and capture photos. Think of a mechanism similar to a portable camcorder and you've got the general idea. SLR cameras, though, are what I would call electro-mechanical - some electronics, some mechanics.
Because digital SLRs attempt to emulate 35mm film, the photos they produce are longer than what you would get with a digital camera. A digital camera produces images that are proportional to the width and height of a computer monitor image. A digital SLR camera produces images proportional to a 35mm negative or print. If you're new to digital SLRs you may find this strange at first.
Because digital SLR cameras have more mechanics, they tend to cost more, although recently, prices on digital SLR cameras have dropped considerably. You can now purchase a quality digital SLR camera for less than $1,000 and in some cases for less than $750.
One key difference between digital SLR cameras and their all-digital counterparts is interchangeable lenses. With just about any digital camera out there, you cannot remove the lens (although a few digital cameras will let you add a converter for telephoto or wide-angle photography). With digital SLR cameras, though, you can remove the lens and swap it out for something else. If you want to take more panoramic shots, you can purchase a wide-angle lens. If you want to take more distant shots (such as at a baseball game), you can purchase a telelphoto lens. If you need flexibility, you can purchase a zoom lens. At extended distances, digital SLR cameras tend to produce less chromatic aberration - also known as "purple fringing" - in telephoto images. If you're not a perfectionist or are new to photography, this probably won't bother you.
Digital SLR cameras also tend to be larger and heavier. You should not buy a digital SLR camera unless you're prepared to carry it around. The Nikon D50 that I shoot with, for example, weighs about a pound and a half. That may not sound like much, but over time you start to feel it. Also, a digital SLR camera tends not to fit in your pants pocket - you will need to buy a separate camera bag to protect it from the elements.
That said, one reason to look at digital SLR cameras is their photo quality. Many digital SLR cameras will let you capture photos at lower light levels with better results than a point-and-shoot digital camera (although point-and-shoot cameras, as of this writing, are improving also). If you can use terms like "aperture", "shutter speed", "ISO" and "depth of field", you'll appreciate that you can control all that with a digital SLR.
Digital SLR cameras are suitable for professional photographers (or aspiring professional photographers) for those who want to control everything in their pictures, or for those seeking more stunning results than can be captured with conventional digital cameras. They may cost more, but the results very often justify the price difference.