You could also try a refurbished Olympus PEN E-PL1, its $189 and comes with a 1 year factory warranty
Olympus PEN E-PL1 Micro 4/3 Digital Camera & 14-42mm Lens
I have a Panasonic Lumix DMC-GF1 and think its a great camera and many reviews of the EPL1 say performance is similar if not better.
"Destiny is not a matter of chance; it is a matter of choice. It is not a thing to be waited for; it is a thing to be achieved."- William Jennings Bryan (1860 - 1925)