Thanks for your reply Tom. Yes, I think physically trying out the camera before buying is a no brainer so I'll def pay a visit to some local dealers.
Bob thanks for the advice about stretching my budget - I'll def look in to those recommendations. My initial concern is that the 18-55 lens might not be versatile enough, especially at the telephoto end.
I've actually found a camera called the "Olympus E-500" for that very price (£330GBP, 490Euro, $660US) - the camera and lens kit are both new, not second hand (Tom what makes you wary of buying second hand lenses?). It comes with two lenses.. 29-90mm wide angle and 80-150 telephoto (35mm equivalent), which seems like a good deal. Here are the specs:
http://www.trustedreviews.com/digital-cameras/review/2006/03/31/Olympus-E-500-Digital-SLR/p4
I've read Gordon's comprehesive review:
http://www.cameralabs.com/reviews/OlympusE500/index.shtml
..as well as user reviews, and it seems to me that on the whole it is an ok camera. Can I please discuss some of the cons as I understand it:
-It has no Image Stabiliser - is this a really bad thing? I should probably say that I would pull out my camera and take spur of the moment shots so should I expect the camera to shake a little if I spend so little time composing the photo? Ofcourse I could put the shutter speed up, but I worried this will impose harsh constraints on what i can/cant do photography wise.
-I remember reading a comment that implied that the model might be discontinued in the near future. Does anyone know about this? Would I be right in guessing that this kind of speaks volumes about the product itself as it shows that the manufacturers themselves think that it has had its day?
-There are only three Autofocus points. I might be taking photos of moving objects, so would the lack of AF points be a huge drawback?
-Finally this is a really stupid question would I be right in saying that to "focus by wire" is to simply move a lever up or down on the camera, which in turn makes the lens zoom in or out? As I understand it, the lever is very sensitive to movement, so why should this system be "infuriating"?
Many thanks,
Ibrahim